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Solana Ltd. follows a policy of fixed dividend payout of 80%. The earning per share for th

Solana Ltd. follows a policy of fixed dividend payout of 80%. The earning per share for th

Solana Ltd. follows a policy of fixed dividend payout of 80%. The earning per share for the year 2005-2006 is Rs.4.50 per share and the same is expected to grow by 20% during the year 2006-2007. The firm earns a return of 18% on its investments. The cost of equity of the company is 15%. The value of the share based on Gordon model would be (approximately)

[A]Rs.31.58
[B]Rs.33.85
[C]Rs.35.75
[D]Rs.39.55

Roshan kumar 31-Dec-2017

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