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Statistics of the company, Company B , to be valued:Dividend / share just paid = Ksh 1 5 Historical dividend growth rate = 1 0

Statistics of the company, Company B, to be valued:Dividend/share just paid = Ksh15Historical dividend growth rate =10% per year. This is expected to be maintained in thefuture. Company B is entirely equity financed.Statistics of a listed company in the same business: =1.6Rf = risk free rate =7%Rm = return from the market =20%This company is geared in the ratio Debt: Equity =2:5Tax rate =30%Required;i.Calculate the required rate of return assuming that company b is also geared in a similar way to company Aii.Assuming there are gearing differences

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