A company has issued 50,000 equity shares of ₹100 each. Its current market price is ₹90 per share and the current dividend is ₹8 per share. The dividends are expected to grow at the rate of 10%. Compute the cost of equit

CS Executive · Financial and Strategic Management · PYQS · June 2021
A company has issued 50,000 equity shares of ₹100 each. Its current market price is ₹90 per share and the current dividend is ₹8 per share. The dividends are expected to grow at the rate of 10%. Compute the cost of equity capital:
(A) 14.07%
(B) 18.78%
(C) 19.78%
(D) 9.78%

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Cost of Capital

Open in Interactive Practice Hub · Full Practice Hub · Chapter Weightage · More in this subject

Related Questions in this Topic