Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Q. Describe the Walters dividend model?
Walter's Model: - Walter's model maintains the doctrine that the dividend policy is relevant for the value of the firm. As-per to the Walter the investment policy of the firm and its dividend policy are interlinked. The major proposition of the Walter approach is the relationship among the following two factors:
(i) The return on firm's investment or else its internal rate of return (r) and (ii) Its cost of capital or the required rate of return (ke) As-per to the Walter approach optimum dividend policy of the firm shall be determined by the relationship between r and Ke.
(i) When Internal Rate of Return is in excess of Cost of Capital (r > Ke):- If the firm's return on investment is in excess of the cost of capital the firm must retain the earnings rather than distributing it to the shareholders for the reason that of the reason that the money is earning more profits in the hands of the firm than it would if it was paid to the shareholders.
(ii) When Internal Rate of Return is beneath Cost of Capital ( r < Ke) :- Alternatively if r is less than Ke the firm must pay off the money to the shareholders in the form of dividends because of the reason that the shareholders can earn higher return by investing it elsewhere.
(iii) If Internal Rate of Return is equivalent to Cost of Capital (r = Ke):- Finally if r is equal to Ke it is a matter of indifference whether the earnings are retained or distributed. For such firms there is no most favourable dividend policy.
financial planning?
Selecting the source of the finance: after prepare of the capital structure an appropriate source of the funds. Various sources of the finance may be raised include share capital
Question: The Statement of Principles for Financial Reporting sets out the principles that should underlie the preparation and presentation of general-purpose financial stateme
Nature of Working Capital: Working Capital Management is concerned with the problems that arise in attempting to organize the Current Assets, the inter-relationship and Curren
#quA stock has a current dividend of $0.32 with a growth rate of 8% annually. Assuming a 10% annual discount rate, what should the price of the stock be one year from today? Answer
What effects have mergers had on fees assessed for retail bank services? A: The effect is not clear. Market conditions and the level of competition frequently determine the cost
Compare and contrast mutual and stockholder-owned savings and loan associations. A few savings and loan associations are owned by stockholders, just like commercial banks and ot
Financial Management: Financial management is, in its most basic interpretation, the management of costs against revenue. Other management initiatives, such as marketing, are d
Examine about Environmental (external) analysis "A study that considers potential environmental effects during planning phase before an investment is made or an operation start
Spreads The difference between two futures price is referred to as ‘spread'. For the same underlying good, if there are two different prices on two different expiration dates, t
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd