Economy, asked by siddharth6241, 1 year ago

Current year dividend of sun ltd is rs 5 per share .expected growth rate is 8% and market capitalization rate is 10%.calculate the intrinsic value of stock?
a)5.4
b)67.5
c)54
d)270

Answers

Answered by abhishek55216
24
world of the sun is the rupees 5% share the accepted the growth rate is the 8% in the market capitalisation rate is the 10% calculate the Indian values will bus stop the 67.5 percent.
Answered by dryomys
1

The Answer is as follows:

Option (D) is correct.

Explanation:

Given that,

Current year dividend, D0 = Rs 5

Expected growth rate, g = 8%

Market capitalization rate, ke = 10%

Next year dividend, D1 = D0 × (1 + g)

                                      = 5 × (1 + 0.08)

                                      = 5.4

Intrinsic value of stock:

= D1 ÷ (ke - g)

= 5.4 ÷ (0.1 - 0.08)

= 5.4 ÷ 0.02

= Rs. 270

Learn more:

Difference between intrinsic and extrinsic value?

https://brainly.in/question/14191218

How to calculate the intrinsic value of a stock?

https://brainly.in/question/2794825

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