7. The MNC Ltd.’s available information is:

k = 15%, E = `30, r =

(a) 14%,

(b) 15% and

(c) 16%

You are required to calculate market price of a share of MNC Ltd. as per Gordon’s Model if: (i) b = 40%, (ii) b = 60% and (iii) b = 80%.

[C.S. Final June 2002]

[Ans. (i) `191.49, `200, `209.30, (ii) `181.82, `200, `222.22,

(iii) `157.89, `200, `272.73]