Abishek Powers Ltd. has a constant dividend growth rate of 5% per annum for perpetuity. This year the company has given a dividend of ₹6 per share. Further, the required rate of return for the company is 10% per annum. T

Div = Dividend at Current year = ₹6 r = required rate of return = 10% g = constant growth rate of dividends till perpetuity = 5% Div 1 = Dividend per share expected to be received at the end of first year = Div * (1+g) = 6 * (1 + 0.05) = ₹6.3 Value of share (P) = Div1 / (r-g) = 6.3 / (0.1 - 0.05) = 6.3 / 0.05 = ₹126