a) You are given the following information Jamuna Ltd Market price per share Tk. 400 Earnings per share Tk. 25 Dividend per share Tk. 10 P/E ratio 8 times Required (Using Walter’s model) i) Cost of equity, ii) D/P ratio, iii) Retention ratio, iv) Internal rate of return,v)Growth rate b) Explain the reasons why do investors prefer high or low pay out ratio? c) Why do you think Dividend Irrelevance theory is unrealistic?

a) You are given the following information Jamuna Ltd Market price per share Tk. 400 Earnings per share Tk. 25 Dividend per share Tk. 10 P/E ratio 8 times Required (Using Walter’s model) i) Cost of equity, ii) D/P ratio, iii) Retention ratio, iv) Internal rate of return,v)Growth rate b) Explain the reasons why do investors prefer high or low pay out ratio? c) Why do you think Dividend Irrelevance theory is unrealistic?

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter3: Analysis Of Financial Statements

Section: Chapter Questions

Problem 6MC: Calculate the projected price/earnings ratio and market/book ratio. Do these ratios indicate that...

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