Teaching UGC NET Mock Test Series 2025 (Paper 1 & 2) Business Finance Capital budgeting decisions Dividend decision
Earnings per share of a company is Rs. 5 and the rate of return required by its shareholders is 16 percent. Assuming Gordon's valuation model, what rate of return should be earned on investment to ensure that the market price of its share is Rs. 50 and the dividend payout is 40 percent?
1
20 percent
2
16.67 percent
3
33.33 percent
4
25 per cent