The shares of Century Textile Ltd are selling at Rs 20 per share. It had paid...
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The shares of Century Textile Ltd are selling at Rs 20 per share. It had paid Rs 2 per share dividend last year. The estimated growth of the company is approximately 5 per cent per year. (i) Determine the cost of equity capital of the company. (ii) Determine the estimated market price of the equity shares if the anticipated growth rate (a) rises to 8 per cent, and (b) falls to 3 per cent. Ignore dividend tax. (iii) Determine the market price of the shares, assuming the growth rate of 20 per cent. Are you satisfied with your calculations? The shares of Century Textile Ltd are selling at Rs 20 per share. It had paid Rs 2 per share dividend last year. The estimated growth of the company is approximately 5 per cent per year. (i) Determine the cost of equity capital of the company. (ii) Determine the estimated market price of the equity shares if the anticipated growth rate (a) rises to 8 per cent, and (b) falls to 3 per cent. Ignore dividend tax. (iii) Determine the market price of the shares, assuming the growth rate of 20 per cent. Are you satisfied with your calculations?
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answer E619 The shares of Century Textile Ltd are selling at Rs 20 per share It h... View the full answer
Related Book For
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
7th edition
Authors: Hilton Murray, Herauf Darrell
Posted Date:
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