Dividend Price Approach:
The cost of equity capital will be that rate of expected dividend which will maintain the present market price of equity shares.
Dividend price approach can be measured with the help of the following formula:
Ke = D / Np
Where,
Ke = Cost of equity capital
D = Dividend per equity share
Np = Net proceeds of an equity share
The cost of equity capital will be that rate of expected dividend which will maintain the present market price of equity shares.
Dividend price approach can be measured with the help of the following formula:
Ke = D / Np
[Post Image Courtesy of JK1991 at FreeDigitalPhotos.net]
Where,
Ke = Cost of equity capital
D = Dividend per equity share
Np = Net proceeds of an equity share
Dividend Price Approach
![Dividend Price Approach]()
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Thursday, April 27, 2017
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