Other Ratios

Question 1

Dividend Valuation model

Answer 1

Do(1+G)/MV +G

Question 2

Extrapolate

Answer 2

Assumes past Dividends will continue into the future

(Do/Past Dividends)1/n -1

Question 3

Gordans Growth Model

Answer 3

G = R*B

R = Return on Equity
B=earnings retention rate

Question 4

CAPM

Answer 4

KE = RF + (RM - RF) B

Question 5

Cost of debt - Irredeemable debt

Answer 5

KD= i x (1 -T) / Current Market Value

Question 6

Cost of debt - Redeemable debt

Answer 6

IRR & NPV

Question 7

Cost of debt - Non tradeable debt

Answer 7

i X (1 - t)

Question 8

Cost of debt - Preference shares

Answer 8

KP - D/p