The liability side of National Ltd. Balance Sheet shows Equity capital ₹ 50 Lakh and Retained Earnings ₹ 80 Lakh. Face value of its share is ₹ 100 each and market value is ₹ 300 each. If the investors expect a dividend o
CS Executive · Financial and Strategic Management · PYQS · December 2024
The liability side of National Ltd. Balance Sheet shows Equity capital ₹ 50 Lakh and Retained Earnings ₹ 80 Lakh. Face value of its share is ₹ 100 each and market value is ₹ 300 each. If the investors expect a dividend of ₹ 16 by the end of year and growth rate is 5%, and if the cost of floatation of issuing fresh Equity is 6%, what is the Cost of Retained Earnings on the basis of dividend growth model ?
Answer & Explanation:
Correct Answer: Option (D)
Official answer key: (D).
Topics: Financial Management
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