Financial information relating to Health Ltd is as follows: Number of ordinary shares 2,000,000 Earnings per share (EPS) 50p Dividend per share (DPS) 25p Growth in dividends 10% Other information: Industry PE 8 Industry β (beta) 1.4 Return on market 14% Risk free rate of return 4% Calculate the value per share of Healthwise Ltd using dividend valuation model; where P0 = D0(1+g)/(Ke – g)

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Financial Ratios

A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.

Return on Equity

The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.