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Corporate Finance · Quiz 1 · 26 Oct 2025 · September 2025 term

Question 6: The PVC stock is trading at Rs 300 today. PVC is expected…

Question 6

+4 marksOne correct option

The PVC stock is trading at Rs 300 today. PVC is expected to pay a dividend of Rs 20 per share next year. If the growth rate of the PVC dividend is 3% every year and the appropriate rate of return is 10% per year, then according to the Gordon growth model

  1. A

    The PVC stock is underpriced, and an investor should buy PVC shares.

  2. B

    The PVC stock is overpriced, and an investor should buy PVC shares.

  3. C

    The PVC stock is underpriced, and an investor should sell PVC shares.

  4. D

    The PVC stock is overpriced, and an investor should sell PVC shares.

Show answer

Correct answer

  • D

    The PVC stock is overpriced, and an investor should sell PVC shares.

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Question 6 of 25 in the IIT Madras BS Corporate Finance (Corporate Finance) Quiz 1 paper sat on 26 Oct 2025, in the September 2025 term (IIT M DEGREE AN EXAM QDB2 26 Oct 2025). It carries 4 marks.

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