Number of existing equity share = 8 crore, Market value of existing share = ₹55, Net earnings = ₹80 crore. Cost of equity on basis of Earning-price Ratio approach is :

CS Executive · Financial and Strategic Management · PYQS · December 2020
Number of existing equity share = 8 crore, Market value of existing share = ₹55, Net earnings = ₹80 crore. Cost of equity on basis of Earning-price Ratio approach is :
(A) 5.55%
(B) 5.15%
(C) 18.18%
(D) 18.02%

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Financial Management

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