a. A company earns ₹ 7 per share. The cost of capital is 10%, the rate of return on investment is 12% and the dividend payout ratio is 20%. Calculate the value of each share by using Walter’s Model. (5 Marks)

b. XYZ Limited has a paid-up share capital of ₹15 lakhs of ₹10 each. The company has a dividend payout rate of 15%. Annual growth rate is expected to be 3%. The capitalization rate is 15%. Calculate the value of the share of XYZ based on Gordon’s Model.

The answer should be in a word format, Don't write in-plane paper. It should be a plagiarism-free. And a min of 800 words

Answer rating: 100% (QA)

PDKrEDK PPrice of share KCost of capital 1001 EEarning per share 7 DDividend Dividend payout xEP... View the full answer