Applying the dividend discount model, determine the relevance of RILs dividend policy to investors behavior and to the boards decision making. You should compute r and g values to use the dividend growth model. Make assumptions and write down your assumptions, so we can understand you (For example, I compute the value for 2009-2015 period. Growth rate will be computed dividend amounts at year 2008 and 2015 and so on). Please compute the value for a few years at least. 
EXHIBIT 3: RIL'S RETURN GENERATION Year End ROCE (%) Mar-2015 Mar-2014 Mar-2013 Mar-2012 Mar-2011 Mar-2010 Earnings Retention Ratio (%) 85.76 86.03 86.16 86.13 87.09 85.90 10.60 11.52 12.15 12.77 13.63 11.89 Dividend Payout Ratio (%) 14.24 13.97 13.84 13.87 12.91 14.10 Date Dividend per share (in INR) Closing market price per share (in INR) Mar-2015 Mar-2014 Mar-2013 Mar-2012 Mar-2011 Mar-2010 Mar-2009 Mar-2008 10 9.5 9 8.5 8 7 13 13 824.70 929.50 773.70 748.25 1,047.80 1,074.65 1523.20 2264.50 EXHIBIT 1: RIL'S STATEMENT OF PROFIT AND LOSS (INR IN M) March, 2015 March, 2014 March, 2013 March, 2012 March, 2011 March, 2010 INCOME: Gross Sales Less: Excise Net Sales 3408140 117380 3290760 4013020 111850 3901170 3711190 108220 3602970 3397920 98880 3299040 2586510 104810 2481700 2003997.9 79387.7 1924610.2 EXPENDITURE : Increase/Decrease in Stock Raw Materials Consumed Power & Fuel Cost Employee Cost Other Manufacturing Expenses General and Administration Expenses Selling and Distribution Expenses Miscellaneous Expenses Less: Pre-operative Expenses Capitalised Total Expenditure 22470 2631320 122990 36860 70210 23477.3 74060 9082.7 15730 2974740 4100 3298370 101530 33700 65440 22930 67820 6770 7150 3593510 -32810 3066290 71660 33540 60940 27160 66720 3310 980 3295830 -9000 2762550 40940 28620 60800 20440 53930 4940 370 2962850 -32090 1946980 22550 26240 63240 21960 53530 2010 300 2104120 -35787.4 1509150.3 27067.1 23077.3 49556.1 21933.6 41237.7 1510.3 12179.2 1625565.8 316020 87210 403230 23670 379560 84880 294680 PBIDT (ExclOI) Other Income Operating Profit Interest PBDT Depreciation Profit Before Taxation & Exceptional Items Exceptional Income / Expenses Profit Before Tax Provision for Tax PAT Appropriations Dividend%) EPS Adjusted EPS 307660 90470 398130 32060 366070 87890 278180 0 278180 58340 219840 305940 95 68.02 34.01 307140 80710 387850 30360 357490 94650 262840 0 262840 52810 210030 297280 90 65.04 32.52 336190 61920 398110 26670 371440 113940 257500 0 257500 57100 200400 265540 85 61.27 30.63 377580 34200 411780 23280 388500 136080 252420 0 252420 49560 202860 252860 80 61.98 30.99 299044.4 31367.4 330411.8 19972.1 310439.7 104965.3 205474.4 0 205474.4 43117.7 162356.7 216198.6 70 49.64 24.82 294680 67490 227190 320450 100 70.21 35.1 EXHIBIT 3: RIL'S RETURN GENERATION Year End ROCE (%) Mar-2015 Mar-2014 Mar-2013 Mar-2012 Mar-2011 Mar-2010 Earnings Retention Ratio (%) 85.76 86.03 86.16 86.13 87.09 85.90 10.60 11.52 12.15 12.77 13.63 11.89 Dividend Payout Ratio (%) 14.24 13.97 13.84 13.87 12.91 14.10 Date Dividend per share (in INR) Closing market price per share (in INR) Mar-2015 Mar-2014 Mar-2013 Mar-2012 Mar-2011 Mar-2010 Mar-2009 Mar-2008 10 9.5 9 8.5 8 7 13 13 824.70 929.50 773.70 748.25 1,047.80 1,074.65 1523.20 2264.50 EXHIBIT 1: RIL'S STATEMENT OF PROFIT AND LOSS (INR IN M) March, 2015 March, 2014 March, 2013 March, 2012 March, 2011 March, 2010 INCOME: Gross Sales Less: Excise Net Sales 3408140 117380 3290760 4013020 111850 3901170 3711190 108220 3602970 3397920 98880 3299040 2586510 104810 2481700 2003997.9 79387.7 1924610.2 EXPENDITURE : Increase/Decrease in Stock Raw Materials Consumed Power & Fuel Cost Employee Cost Other Manufacturing Expenses General and Administration Expenses Selling and Distribution Expenses Miscellaneous Expenses Less: Pre-operative Expenses Capitalised Total Expenditure 22470 2631320 122990 36860 70210 23477.3 74060 9082.7 15730 2974740 4100 3298370 101530 33700 65440 22930 67820 6770 7150 3593510 -32810 3066290 71660 33540 60940 27160 66720 3310 980 3295830 -9000 2762550 40940 28620 60800 20440 53930 4940 370 2962850 -32090 1946980 22550 26240 63240 21960 53530 2010 300 2104120 -35787.4 1509150.3 27067.1 23077.3 49556.1 21933.6 41237.7 1510.3 12179.2 1625565.8 316020 87210 403230 23670 379560 84880 294680 PBIDT (ExclOI) Other Income Operating Profit Interest PBDT Depreciation Profit Before Taxation & Exceptional Items Exceptional Income / Expenses Profit Before Tax Provision for Tax PAT Appropriations Dividend%) EPS Adjusted EPS 307660 90470 398130 32060 366070 87890 278180 0 278180 58340 219840 305940 95 68.02 34.01 307140 80710 387850 30360 357490 94650 262840 0 262840 52810 210030 297280 90 65.04 32.52 336190 61920 398110 26670 371440 113940 257500 0 257500 57100 200400 265540 85 61.27 30.63 377580 34200 411780 23280 388500 136080 252420 0 252420 49560 202860 252860 80 61.98 30.99 299044.4 31367.4 330411.8 19972.1 310439.7 104965.3 205474.4 0 205474.4 43117.7 162356.7 216198.6 70 49.64 24.82 294680 67490 227190 320450 100 70.21 35.1
