From the details given below, find out the Value of Santosh Ltd. an unlisted company: No. of shares issued and paid up of ₹10 each 5,00,000 Current Dividend ₹5 per share Annual Dividend growth rate 10% Assume that this g

Calculation of Value of Santosh Limited: Step -I (Rate of return of similar Listed Company) Rate of Return required by shareholders = {Dividend Current (1+ rate of growth in dividend) / share price} + Rate of growth of dividend = {₹20 (1+0.10) / ₹120} + 0.10 = 0.283 or say 28.3% Step -II (Unlisted Company - Santosh Limited) Share Price = {Current Dividend (1 + rate of growth in dividend)} / {Rate of Return required by shareholders - rate of growth in dividend} = {₹5 (1+0.1)} / {0.283-0.10} = ₹30.05 Value of Santosh Limited = No. of shares * Price per share = 500000 * ₹30.05 = ₹1,50,25,000.00