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Dividend Price Approach

Dividend Price Approach:

The cost of equity capital will be that rate of expected dividend which will maintain the present market price of equity shares.

Dividend price approach can be measured with the help of the following formula:

Ke = D / Np

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Ke = Cost of equity capital

D = Dividend per equity share

Np = Net proceeds of an equity share

Dividend Price Approach Dividend Price Approach Reviewed by Blog Editor on Thursday, April 27, 2017 Rating: 5

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