The target payout ratio for Dynamic Super Machines Ltd. is 0.4. The dividend per share for the current year is Rs. 14. The dividend per share in previous year was Rs. 12. The weightage given to the current year earning is 0.60. The number of equity share outstanding in the company is 10,00,000.   If P/E multiple is 9, applying Linter MODEL

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
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Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 66P
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The target payout ratio for Dynamic Super Machines Ltd. is 0.4. The dividend per share for the current year is Rs. 14. The dividend per share in previous year was Rs. 12. The weightage given to the current year earning is 0.60. The number of equity share outstanding in the company is 10,00,000.

 

If P/E multiple is 9, applying Linter MODEL of dividend policy to the company, compute the market capitalization of the company.

 

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