● 11. The appropriate capitalisation rate for a company which belongs to a risk class is 10%. Presently the company has 1,00,000 shares selling at `100 each. The company is contemplating the declaration of `5 as dividend at the end of the current financial year which has just started. What will be the price of the share at the end of the year (a)

if dividend is not declared;

(b) if dividend is declared? Answer these on the basis of Modigliani and Miller Model and assume no taxes.