The common stock of GVK Ltd. is currently selling for Rs. 70 per share. Dividend per...

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Finance

The common stock of GVK Ltd. is currently selling for Rs. 70 pershare. Dividend per share has grown from Rs. 2 to the current levelof Rs. 6 over the past ten years and this dividend growth isexpected to continue in future also. What is the required rate ofreturn of the GVK Ltd. ?

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Step 1 Calculation of dividend growth rate in past 10 years We can use the Future value formula to calculate dividend growth rate Future See Answer

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The common stock of GVK Ltd. is currently selling for Rs. 70 pershare. Dividend per share has grown from Rs. 2 to the current levelof Rs. 6 over the past ten years and this dividend growth isexpected to continue in future also. What is the required rate ofreturn of the GVK Ltd. ?

The common stock of GVK Ltd. is currently selling for Rs. 70 per share. Dividend per...

60.1K

Verified Solution

Question

Finance

The common stock of GVK Ltd. is currently selling for Rs. 70 pershare. Dividend per share has grown from Rs. 2 to the current levelof Rs. 6 over the past ten years and this dividend growth isexpected to continue in future also. What is the required rate ofreturn of the GVK Ltd. ?

Answer & Explanation Solved by verified expert

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