he following information is collected from the current annual report of XYZ Ltd : Earning of firm Rs. 9, 00,000 Number of equity shares 1, 50,000 Return on Equity 22.5% Cost of equity 15% What should be the dividend payout ratio so as to keep the share price at Rs. 48 by using Walter Model? Also, determine the optimum dividend payout ratio and the market price of share at the optimum dividend payout ratio. What will the maximum and minimum share price under this model?
he following information is collected from the current annual report of XYZ Ltd : Earning of firm Rs. 9, 00,000 Number of equity shares 1, 50,000 Return on Equity 22.5% Cost of equity 15% What should be the dividend payout ratio so as to keep the share price at Rs. 48 by using Walter Model? Also, determine the optimum dividend payout ratio and the market price of share at the optimum dividend payout ratio. What will the maximum and minimum share price under this model?
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter11: Determining The Cost Of Capital
Section: Chapter Questions
Problem 13P: The Cost of Equity and Flotation Costs
Messman Manufacturing will issue common stock to the public...
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The following information is collected from the current annual report of XYZ Ltd
:
Earning of firm Rs. 9, 00,000
Number of equity shares 1, 50,000
Return on Equity 22.5%
What should be the dividend payout ratio so as to keep the share price at Rs. 48 by
using Walter Model? Also, determine the optimum dividend payout ratio and the
market price of share at the optimum dividend payout ratio. What will the
maximum and minimum share price under this model?
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