In case where a company is likely to have the supernormal growth for a limited finite period and the normal growth thereafter, the value of the share can be computed as:
Where gs = supernormal growth rate,
n = number of years for supernormal growth rate
gN = normal growth rate, P0 = price of share at time 0,
t = year, D = Dividend, ke = cost of equity
| A. | Only (a) |
| B. | Sum total of (a) and (b) |
| C. | Sum total of (b) and (c) |
| D. | Sum total of (c) and (d) |
Answer : B Explanation : |
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Option: A Explanation : Explanation will come here. Explanation will come here. Explanation will come here. Explanation will come here. Explanation will come here. |
