As an analyst, you are trying to assess the dividend decision of X Co$.$ The company had a buyback of

shares of $400$ crores INR in March $2022.$ The market value capital structure ratio $($D$/$V$)$ for X Co$.$ for

March ending $2022$ is $35\%,$ and the cost of unlevered equity is $20\%.$ The $($marginal$)$ corporate tax rate

is $30\%.$ The YTM of the Indian Government T$-$bill rate is $5\%.$ The cost of debt at D$/$V of $35\%$ is

determined through a synthetic rating.

From the financial statements of X Co$.,$ you have the following information: $-$

All values in INR crores. The profit and loss statement is for the period $21-\text{'}22.$

All values in INR crores for Balance sheet items for Year ending.

Note: The country default risk premium is zero. No preferred equity holders. D$/$V is the Market value

of debt to the market value of the firm. $[4$ x $5$ MARKS$]$

$3\mathrm{.}1.$ What is the cost of equity for $x$ Co$.$ for $2022($upto $2$ decimal places$)?$

$3\mathrm{.}2.$ What is the ROE $($return on equity$)$ for $x$ Co$.$ for $2022($upto $2$ decimal places$)?$

$3\mathrm{.}3.$ What is the Excess cash $($in INR crores$)$ for X Co$.$ for $2022($up to $2$ decimal places$)$ Excess cash is

FCFE minus sum of Dividends and Share buyback.

$3\mathrm{.}4.$ What is the Outcome of the dividend framework?

Write your answer:As an analyst, you are trying to assess the dividend decision of X Co$.$ The company had a buyback of

shares of $400$ crores INR in March $2022.$ The market value capital structure ratio $($D$/$V$)$ for X Co$.$ for

March ending $2022$ is $35\%,$ and the cost of unlevered equity is $20\%.$ The $($marginal$)$ corporate tax rate

is $30\%.$ The YTM of the Indian Government T$-$bill rate is $5\%.$ The cost of debt at D$/$V of $35\%$ is

determined through a synthetic rating.