An investor wants to invest in an equity share of ABC Ltd. The company's last EPS was ₹ 40 per share and the dividend payout ratio is 35%. The required rate of return from equity investment is 20%. The intrinsic value of

CS Executive · Corporate and Management Accounting · PYQS · June 2024
An investor wants to invest in an equity share of ABC Ltd. The company's last EPS was ₹ 40 per share and the dividend payout ratio is 35%. The required rate of return from equity investment is 20%. The intrinsic value of equity is:
(A) ₹ 200
(B) ₹ 40
(C) ₹ 70
(D) ₹ 100

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Corporate Accounting

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