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Dividend Decisions - ICAI - Practical Problem No.8

Financial Management

Can anyone please help me with the (iii) part of this question? The book answer is 1,950 but I am getting 1,772. I used this formula: Vf (or) nPo = [(n+m)P1 - I + E] / (1+Ke) Kindly help.

Varshaa M

CA Final

★ 33K+

23-Mar-23 20:55

274

Answers (3)

Best Answer

In these question sub part 3 , it's been asked for market value of the shares not the value of firm ,the formula you used is for value of firm, so if u r not using (1+Ke) it comes correct.

Prethivi Rajan

CA Final

★ 9K+

24-Mar-23 00:36

Prethivi Rajan

In these question sub part 3 , it's been asked for market value of the shares not the value of firm ,the formula you used is for value of firm, so if u r not using (1+Ke) it comes correct.

Market Value of Shares = Number of Outstanding Shares x Current Share Price

Prethivi Rajan

CA Final

★ 9K+

24-Mar-23 00:40

Prethivi Rajan

Market Value of Shares = Number of Outstanding Shares x Current Share Price

Thank you so much

Thread Starter

Varshaa M

CA Final

★ 33K+