Financial Managment
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
17 November 2010
Hi Experts,
In Cost of equity formuale(D1/Po+G) wat is D1/G and G kindly confirm my doubts
In Cost of equity formuale(D1/Po+G) wat is D1/G and G kindly confirm my doubts
17 November 2010
As per Gordon’s theory, the cost of equity, ke = (D1/P0) + g. In this equation, D1 = dividend at T1, P0 = market value of the share at T0 and g = growth rate in decimals. We can have variations of this equation and find out any of the four parameters, given the other parameters. The variations are:
To determine growth rate, g = ke – (D1/P0),
To determine P0 = D1/(ke – g) and
To determine D1 = P0 x (ke – g)
To determine growth rate, g = ke – (D1/P0),
To determine P0 = D1/(ke – g) and
To determine D1 = P0 x (ke – g)
Querist : Anonymous
Querist :
Anonymous
(Querist)
17 November 2010
ok sir sir one another doubt is
1.When we find out Ke in a paticular year,whether it is same for all years?if no then wat il be for the next year
2.In D1(Already we are considering growth rate for present the year then why are taking g(growth) again seperately?
1.When we find out Ke in a paticular year,whether it is same for all years?if no then wat il be for the next year
2.In D1(Already we are considering growth rate for present the year then why are taking g(growth) again seperately?
17 November 2010
https://www.managementparadise.com/forums/archive/index.php/t-183477.html
Please check out above link.
Please check out above link.
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