Multiple choice

Calculate the market value of share if the payout is 75%, EPS of the company is Rs. 16, market rate of discount is 12.5% and the return on retained earnings is 10% .

  1. Rs. 100

  2. Rs. 115.20

  3. Rs. 121.60

  4. Rs. 108.80

  5. None of these

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Value = D + IRR ÷ cost of capital ( E-D) ÷ cost of capital