Menu
Cost of capital nov 2016,ipc question
"Market price of equity -40 per share and it is expected that a dividend of 4 per share would be declared.The DPS is expected to grow @ 8% every year"
Calculate Ke
Replies (3)
Ke = (DPS / Price*100) + Growth Rate
Ke = (4/40*-100)+8
Ke = 10+8
Ke = 18%
I think Rs 4 given for DPS is not D0 but it's D1. because the words used in the problem are "it is expected that a dividend of Rs 4 would be declared", so it should be treated as D1
Yes.In my view too it should be treated as D1 .But ICAI suggested answers it has been treated as D0.
Recent Topics :
- LTCG 112A and business loss
- FAST-DS 2026 applicability: foreign employee share
- NRI Property Sale in India: TDS Rates and Key Comp
- Clarification on September 2026 PF Calculation for
- DRC-03 interest paid under CGST/SGST instead of IG
- GSTR1 amendment Bulk bills
- Capital Gain on Sale of Gold
- GST SALES RETURN MISSING 2025-26 FY
- Enquiry on FAST-DS system generated email
- Capital gain on sale of agriculture land
Related Topics :
CAclubindia
