how can we compare Cost of Equity with Dividends ?. I mean Cost of Equity is the return required by Equity holders on the risk they bear and dividends is the return they receive.
Lets take a simple example:
If equity is $ 100,000. and Dividend is Rs. 5,000 while Ke is 7.5%
can we say Required Return on Equity is 7,500 but Dividend is 5,000. and Equity holders are receiving lesser return.
Ignoring the fact that return is also in the shape of increase in Share Price.
Please comment on this theory.
Lets take a simple example:
If equity is $ 100,000. and Dividend is Rs. 5,000 while Ke is 7.5%
can we say Required Return on Equity is 7,500 but Dividend is 5,000. and Equity holders are receiving lesser return.
Ignoring the fact that return is also in the shape of increase in Share Price.
Please comment on this theory.
