Question

ABC Ltd. has a capital of Rs. 10,00,000 in equity shares of Rs.100 each.
The shares are currently quoted at par. The Co. proposes to declare a
dividend of Rs.10 per share at the end of the current financial year. The
capitalization rate for the risk class to which the co. belongs is 12%.
What will be the market price of the share at the end of the year, if:
i) a dividend is not declared?
ii) a dividend is declared?
iii) assuming that the co. pays the dividend and has net profits of
Rs.5,00,000 and makes new investments of Rs.10,00,000 during the
period, how many new shares must be issued? Use MM Model.

Answer 1

Answer:

does not know do it

Explanation:

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