Question

A mining company's iron ore reserves are being depleted and its cost of recovering a declining quiantity of iron are raising each year. As a sequel to it, the company's earning and the dividend are declining ata rate of 8% per year. If the previous years dividend was rs 10 and ror is 15% what would be the current price of the equity share of the company.
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Answer 1

Answer:

Equity 12.5% 4/20 2.50 12% debenture 7.2% 4/20 1.44 18% Term loan 10.8% 12/20 6.48 Weighted average cost= 10.42 Problem 6 The following information is available from the Balance Sheet of a company Equity share capital – 20,000 shares of Rs. 10 each Rs. 2,00,000 Reserves and Surplus Rs. 1,30,000 8% Debentures Rs.