What the intrinsic value bharat equity share calculate the intrinsic value bharat limited equity share

To calculate the intrinsic value of Bharat Limited's equity share, we can use the dividend discount model (DDM) under the assumption of constant growth.

Given information:

Required rate of return (r): 15%

Step 1: Calculate the dividends for the next 5 years.

D4 = D3 * (1 + g1)

D5 = D4 * (1 + g1)

D5 = Rs 16.58 * (1 + 0.20) = Rs 19.90

Step 2: Calculate the dividend after 5 years using the stable growth rate.

To calculate the present value, we discount each dividend using the required rate of return (r).

PV(D1) = D1 / (1 + r)

PV(D6) = D6 / (1 + r)^5 (Note: We use the 5th year because it's the first year of stable growth)

PV(D1) = Rs 9.60 / (1 + 0.15) = Rs 8.35

PV(D6) = Rs 744.80 / (1 + 0.15)^5 = Rs 288.40

Step 4: Calculate the intrinsic value.