CA Mayank
(Job in a Co-operative Bank)
(1142 Points)
Replied 19 April 2017
Ke = (DPS / Price*100) + Growth Rate
Ke = (4/40*-100)+8
Ke = 10+8
Ke = 18%
CA Mayank
(Job in a Co-operative Bank)
(1142 Points)
Replied 19 April 2017
I think Rs 4 given for DPS is not D0 but it's D1. because the words used in the problem are "it is expected that a dividend of Rs 4 would be declared", so it should be treated as D1
shilpi
(student)
(780 Points)
Replied 19 April 2017
Yes.In my view too it should be treated as D1 .But ICAI suggested answers it has been treated as D0.
CAclubindia
