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Querist : Anonymous

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Querist : Anonymous (Querist)
22 October 2011 HI
PLEASE ANSWER THIS....

THE NEXT DIVIDEND PAID BY X LTD WILL BE 1.90/-PER SHARE.THE DIVIDENDS ARE ANTIIPATEDTO MAINTAIN A 5.5% GROWTH RATEFOR EVER.IF THE STOCK CURRENTLY SELLS FOR 47/- PER SHARE.WHAT IS THE REQUIRED RATE OF RETURN
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CA RICHA BADALIA

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CA RICHA BADALIA (Expert)
22 October 2011 P0=D1/Re-g

47=1.9/Re-.055

Re=9.5%
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CA Ravi Sisodia

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CA Ravi Sisodia (Expert)
22 October 2011 According to me =
P0=D1/Ke-g


47 = 2/Ke-.055

Ke=9.755%
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CA Ravi Sisodia

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CA Ravi Sisodia (Expert)
22 October 2011 i assume this =

D0 = 1.90

D1 = 2 (1.90 + 5.5% of 1.90)
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CA RICHA BADALIA

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CA RICHA BADALIA (Expert)
22 October 2011 Sir
As it is given next dividend is 1.90 i assumed D1=1.90.
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CA Ravi Sisodia

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CA Ravi Sisodia (Expert)
22 October 2011 CA Richa ji, agree with you. because of the language confusion it may be assumed as D1 or also D0.

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