Why in this question EPS is considered as EPS¹ and not EPS⁰ ???

Question

Shubham · Answer

Ha toh Question me jo information h vo current year ka end thodi h jo direct hum usse E1 bol de , vo bhi Eo he h n !!

Ishita · Answer

Unhone directly E1 lia hai instead of E0 isslie ans mai D1 aaya hai instead of D0

Ishita · Answer

Naah Unhone (E1*dp) ratio kia hai isslie D1 hai Agar unhone E1 k badle E0 lia hota toh D0 hota Ismai assumption kuch krna nhi hai

Shubham · Answer

Ya aisa h ky question me annual word use hua so humney ye assume kia ki vo year ended ka information h ????

Shubham · Answer

Dekho hum P⁰=D¹ ÷ (ke-g) lete h right, but answer me unhone direct D⁰ leke Calculate kia h P⁰ ,D¹ kyu nhi lia ; D⁰ko D¹ kyu assume kia

Shubham · Answer

But in answer they have taken D⁰ n ??? that's my doubt , they have not taken D¹

Ishita · Answer

Both are same only The only thing is we have to find the price of current year So it doesnt matter on other hand that you use the simplified or this formula Ans would come the same

Ishita · Answer

You can directly take D1 in the numerator too insted of E1(1-b)

Ishita · Answer

Yeah that is not mentioned but we have to find the price for CY ie. P૦ so fir that we take D1 only D૦(1+g)÷(ke-g) This is the formula

Shubham · Answer

But in question it's not mentioned that dividend is for next expected year so we have to always assumed that it's for last year and also in question information about growth is also provided, so can't we add growth to that dividend [D⁰=EPS x DPR,D¹= D⁰(1+g)]

Ishita · Answer

Have just elaborated the formula the formula goes like p0 = D1÷(k e - g ) D1 expected dividend for the current year that's why they have taken that Reasoning is that if you take earnings per share multiplied by the dividend payout ratio you would get D1 so they have just elaborated D1 like earnings per share multiply by dividend payout ratio that's why instead of even they have written E1

Shubham · Answer

I m unable to share the solution but u can refer it from module page no. 8.48

Ishita · Answer

Can you share the solution

Why in this question EPS is considered as EPS¹ and not EPS⁰ ???

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