Financial statements of ABC Company show earnings of $ 5, 000,000 for the current year....
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Finance
Financial statements of ABC Company show earnings of $ 5, 000,000 for the current year. As per the company policy, a retention rate is 40%, the equity capitalization rate is 12% and the rate of return on investment is 15%. Required
a. What would be the market per share as per Walters model?
b. What is the optimum dividend payout ratio according to Walters model and the market value of the companys share at that payout ratio?
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