Hi,
Can anyone help me with the following:
While calculating cost of Equity (Ke) using CAPM method , How to distinguish b/w """ D0 and D1""".
Pleaes help me with the best possible easy way , as it's already very confusing.
Thanks in Advance.
3 Replies
Back in the Game
(a)
(1273 Points)
Replied 12 March 2012
D0-is the Cash Flow(dividend) for the investor as of nw.
D1 is the Cash Flow (Dividend) for the investor at the end of Year 1 from the date of his investment.So D1=D0(1+G).
This s the basic Difference.
Rahul
(Accountant)
(105 Points)
Replied 12 March 2012
Thank you Mr.A....for the reply....but my query is ...how to recognise it in the question....as it's very confusing at times....mathameticaly i know how to solve it.....but....not able to distinguish amoung D0 and D1
kaushikkrishna
(stu)
(42 Points)
Replied 12 March 2012
when the words such as will or shall are used in the problem or any word represententing some action in future then its D1 or else its D0
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