financial_management_[www.accfile.com]

Dividend Decision 113
If the firm follows a policy of 60% payout then b=20% =0.20
The price is
P =
= 0.05
r=4% =0.04, D =25% of 10=2.50
= = Rs. 41.67
If payout ratio is 50%, D=50% of 10=Rs. 5
r=12%=0.12, D=50% of 10 = Rs. 5
=
=
= = Rs. 83.33
r = 8% = 0.08, D = 50% of 10 = 5
+
=
=
= = Rs. 69.42
r = 4% = 0.04, D = 50% of 10 = 5
=
=
= = Rs. 55.58