Krishna's company earns a rate of 12% on its total investment of Rs, 600000 in assets. There have been 600000 outstanding common Shares at RS, 10 per share. Discount rate of the firm share is 10% and it has a policy of retaining 40% of the earnings . Determine the price of its shares using Gordon's model. what shall happen to the price ofthe share if the company has Payout of 60% (or) 20 % ?

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To determine the price of Krishnas company shares using Gordons model we can use the following formu... View the full answer