The stock price last year was Rs 60 and this year the stock price is 63. The

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The stock price last year was Rs 60 and this year the stock price is 63. The price of 60 corresponds to a P/E ratio of 7.5:1 and a dividend cover of 2.
An analyst employs a constant growth model to value the stock.

What are the values of the growth rate and discount rate estimated by him? If the cost of debt is 10% per annum and the tax rate is 25%.

What is the WACC assuming a debt-equity ratio of 3:2?

Related Book For answer-question

Corporate Finance

ISBN: 978-0077861759

10th edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe

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Posted Date: Mar 29, 2023 01:07 AM

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The stock price last year was Rs 60 and this year the stock price is 63. The

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To use the constant growth model to value the stock we need to estimate ... View the full answer

Corporate Finance

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