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A Company has total investment of Rs . 5 Lakhs assets and 5 0 , 0 0 0 outstanding equity shares of Rs . 1

A Company has total investment of Rs.5 Lakhs assets and 50,000 outstanding
equity shares of Rs.10 each. It earns a rate of 15% on its investment and has a policy of retaining 50% of the earnings. If the appropriate discount rate for the firm is 10%, you are required to determine the price of its share using Gordon model. What shall happen to the price, if the company has a payout of 80% and 20%.

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