Example on walters dividend model, Financial Management

Assignment Help:

Q. Example on Walters dividend model?

Example: - The following information is obtainable in respect of a firm:

Capitalisation Rate (Ke)                     = 10%

Earning Per Share (E)                         = Rs. 8

Compute the market price of share under Walter's Model by assuming Rate of Return

(i) 15%            (ii) 10%           (iii) 5%            and

Dividend Payout Ratio

(i) 0%              (ii) 25%           (iii) 50%         (iv) 75%          (v) 100%

Solution:-

DIVIDEND POLICY AND THE VALUE OF SHARE ( WALTER'S MODEL)

773_Example on Walters dividend model.png


Related Discussions:- Example on walters dividend model

Define condition for fixed-for-floating interest rate swap, What is the ess...

What is the essential condition for a fixed-for-floating interest rate swap to be possible? For a fixed-for-floating interest rate swap to be feasible it is essential for a quali

State the term- financing decision, State the term- Financing Decision ...

State the term- Financing Decision The second financial decision is financing decision,which essentially addresses two questions: a. How much capital must be raised to fu

Report on bank''s predicts of exchange rates, Q. Report on bank's predicts ...

Q. Report on bank's predicts of exchange rates? Report on banks' predicts of exchange rates. The three banks have produced extensively differing forecasts which even involve

Rating symbols, Rating Symbol Capacity ...

Rating Symbol Capacity for Timely Repayment Rating Symbol Capacity for Timely Repay

Show social and regulatory factors, Q. Show Social and Regulatory Factors? ...

Q. Show Social and Regulatory Factors? Regulatory climate and legislation against the environmental degradation may impair the profitability of the industry. Price control, vol

Cost of capital, discuss the cost of capital in finance

discuss the cost of capital in finance

Define the operating leverage effect, What is the operating leverage effect...

What is the operating leverage effect and what causes it?  What are the potential benefits and negative consequences of high operating leverage? The phrase operating leverage e

Explain potential and current lenders of long-term funds, Which ratios woul...

Which ratios would a potential long-term bond investor be most interested in? Explain. Potential and Current lenders of long-term funds, such as bondholders and banks, are con

Prepare a report for the managing director, The Managing Director of your f...

The Managing Director of your firm is thinking aloud about an appropriate gearing level for the company: "The consultants I spoke to yesterday explained that some academic th

Calculate actual returns using the dividend discount model, You've just won...

You've just won a huge $100 million lottery.  You've decided to invest your winnings in the following way:  $30 million in real estate,  $30 million in  corporate bonds and $40 mil

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd