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Mr. Subramanian is a shareholder in Alpha Company Ltd. Although earnings for the Alpha company have varied considerably, Subramanian has determined that long turn average
Mr. Subramanian is a shareholder in Alpha Company Ltd. Although earnings for the Alpha company have varied considerably, Subramanian has determined that long turn average dividends for the firm have been Rs. 5 per share. He expects a similar pattern to prevail in the future. Given the volatility of the Alphas minimum rate of 40%, should it be earned on a share, what price would Subramanian be willing to pay for the Alpha is shares? (Ans. Rs. 12.50%)
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