Question

A company’s share is currently quoted at a market price of ₹120 per share. The company is expected to pay a dividend of ₹12 per share in the next year, and dividends are anticipated to grow at a constant rate of 5% per annum indefinitely. Using the Gordon Growth Model (Dividend Discount Model), calculate the cost of equity (Ke) for the company.

A 10%
B 12%
C 15%
D 20%
E 25%
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