Answer Happy

ie C. he p illa 11) Net Dividend per share Year 4.86 e) Primarks Plc is a successful retail company in clothing. Over the past 5years, it has increased its share of the market by 30%. Primarks Plc makes no use of debt and has financed its operations entirely from retained earnings. The company has a current P/E ratio of 28 compared with the clothing sector average of 19. Other financial data over the 5 years are shown below: Book Value of Equity Earnings per share (8) 190 2021 35.80 11.00 2020 103 16.10 2019 124 19.30 5.86 2018 142 24.70 7.50 2017 30.50 165 9.00 Not that, 2021 is the current year. Required: Estimate the cost of equity capital for Primarks Ple using the following Dividend Growth Model ii) Discuss whether the assumptions underlying the models used in part (a) above are realistic, and explain how the effects of using these assumptions are reflected in the results obtained (4% Marks)