- A firm`s present market price of the share is Rs 40 and its EPS is Rs...
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Question:
- A firm`s present market price of the share is Rs 40 and its EPS is Rs 12. The firm is planning to declare 45% of this as dividends. If the firm reinvests its retained earnings at the rate of 14%, the cost of its equity according to Gordon dividend capitalization model is:
a) 20%
b) 21.20%
c) 22%
d) 26.20%
Related Book For
Intermediate Accounting
ISBN: 978-0132162302
1st edition
Authors: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
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