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Corporate Finance · End Term · 13 Apr 2025 · January 2025 term

Question 34: The current share price of HCL is Rs 600. HCL is expecte…

Question 34

+4 marksOne or more correct options

The current share price of HCL is Rs 600. HCL is expected to pay a dividend of Rs 25 per share next year. The appropriate rate of return is 8% per year and the HCL dividend is expected to grow at a rate of 3% every year. Then, according to Gordon Growth model

Select all that apply.

  1. A

    HCL stock is underpriced.

  2. B

    HCL stock is overpriced.

  3. C

    An investor should buy HCL shares.

  4. D

    An investor should sell HCL shares.

Show answer

Correct answers

  • B

    HCL stock is overpriced.

  • D

    An investor should sell HCL shares.

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Question 34 of 35 in the IIT Madras BS Corporate Finance (Corporate Finance) End Term paper sat on 13 Apr 2025, in the January 2025 term (IIT M IMPROVEMENT AN EXAM QIM3 13 Apr 2025). It carries 4 marks.

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