Antique Arts Company would pay Rs. 2.50 as dividend per share for the next year

and is expected to grow indefinitely at 12%. What would be the equity value if the investor require 20% return?

Please type your subject in the School Subject box. Any other words, including obscure abbreviations, are likely to delay responses from a teacher who knows that subject well.

To calculate the equity value of Antique Arts Company, we need to use the dividend discount model (DDM) formula.

The DDM formula is:
Equity Value = Dividend per Share / (Required Return - Dividend Growth Rate)

Given information:
Dividend per Share = Rs. 2.50
Dividend Growth Rate = 12%
Required Return = 20%

Let's substitute these values into the formula:

Equity Value = 2.50 / (0.20 - 0.12)
Equity Value = 2.50 / 0.08
Equity Value = Rs. 31.25

Therefore, the equity value of Antique Arts Company would be Rs. 31.25 if the investor requires a 20% return.