Cost of Capital - FM Question. - Students

Cost of Capital - FM Question.

Page no : 2

(Guest)

i still cant understand..

plz help me...

plz show detailed workings

Upgrade to CAclubindia Pro. Subscribe Now!

Sunshine (Helping All) (10575 Points)
Replied 08 October 2010

this is the detailed working only..u just need to multiply the figures with the assumed discounted rates (18% and 19% and do interpolation)...ask me if there's any problem...what point u dont understand??

Manoj jain (Intern) (535 Points)
Replied 08 October 2010

Agreed with Sneha.. correct answer is 18.11%

1 Like

Sunshine (Helping All) (10575 Points)
Replied 08 October 2010

@ freak guy...dont try to read and understand...solve it urself and apply the process...then u will be able to do it...apply interpolation here...

CA Nagendra (CA) (1788 Points)
Replied 08 October 2010

I think "freak guy" and all other friends got his answer.

Sneha bagla is 100% correct toward her approach. However, if any one have still confusion about calculation part, you can see this detail calculation.

Upgrade to CAclubindia Pro. Subscribe Now!

Sunshine (Helping All) (10575 Points)
Replied 08 October 2010

thanx for uploading this sir.........

CA Nagendra (CA) (1788 Points)
Replied 08 October 2010

I think earlier calculation is not visible clearly.

You can down load the same solution as suggested in earlier post from the attachment.

Attached File : 31 dividend policy question.pdf downloaded: 167 times

CA Nagendra (CA) (1788 Points)
Replied 08 October 2010

Originally posted by : Sneha Bagla
	thanx for uploading this sir.........

Wel come sneha bagla

CA. Abhishek K. Pandey (Manager (Advance)) (901 Points)
Replied 09 October 2010

Ok. But, how Po=1.2*PVIF(Ke,1)+..........+(2.488+P5)PVIF(Ke,5) ?????? Also, if Price of share isn't changing, then why can't we put the value in P5=2.737/(Ke-0.10).