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A company is planning to make an investment of Rs . 1 0 , 0 0 , 0 0 0 and it expects to earn

A company is planning to make an investment of Rs.10,00,000 and it expects to earn Rs.5,00,000 by the year end. Presently the company has 50,000 outstanding shares and the shares of the company is trading at a price of Rs.125. The company expects to pay the shareholders Rs.10 as dividends next year. Calculate the Value of the firm if dividend is declared, and value of the firm when dividends are not declared.

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