Assume that investors expect a payoff of Rs.305.2 a year from now from one share of ABC Ltd: Rs. 5.2 by way of dividend and Rs. 300 by way of the share price. If the dividend is taxed at 10 percent and capital appreciation is taxed at 20 percent, what will be the current price of ABC Ltd’s share if investors expect a post-tax return of 14 percent?

Answer rating: 100% (QA)

Solution In this Dividend Rs 52 90 468 capital ... View the full answer