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Example 5: The cost of capital and the return on Investment (ROI) of a company...

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Accounting

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Example 5: The cost of capital and the return on Investment (ROI) of a company is 15% and 20% respectively. The company has 1.5 million equity shares of * 10 each outstanding and its earnings per share is * 6. Calculate the value of the firm in the following situations by using Walter's model. (i) 100% retention. (ii) 50% retention. (iii) No retention. Comment on your findings

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