$12m ordinary share currently valued at 300k per share finance Okun plc.A divided of $7m is the payment.calculate the cost of equity
To calculate the cost of equity for Okun plc, we use the dividend valuation model.
Cost of Equity = Dividends / Current Market Value
Dividends = $7m
Current Market Value = $300k per share
Now, we need to find the number of outstanding shares to get the total market value.
Total Market Value = Number of Shares x Current Market Value
Number of Shares = Total Market Value / Current Market Value
Total Market Value = $12m
Current Market Value = $300k per share
Number of Shares = $12m / $300k = 40
Cost of Equity = $7m / 40 shares = $175k per share