DIVIDEND POLICY

Task1 Given the following information about Sunrise industries Ltd. Show the effect of the dividend policy on the market price per share, using walters model. EPS= Rs.8 Cost of capital (K) = 12% Assumed rate of return a) 15% b) 10% c) 12% Task 2 If K= 11% and earnings per share is Rs . 15. Calculate the price per share of Cushman Ltd. For r = 12%, 11% and 10% for the following levels of D/P ratios. D/P ratios 1. 10% 2. 30% 3. 50% Find out market price per share by using Gordon module. retention ratio 90% 70% 50%

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Dr. S. Bhatt MBA, ACA, MFM, ACS, CFA, PGPM, MPhil., PhD, drbhatt2006@gmail.com