The earnings per share of a company is Rs 8 and the rate of capitalisation applicable...
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The earnings per share of a company is Rs 8 and the rate of capitalisation applicable is 10 per cent. The company has before it, an option of adopting (i) 50, (ii) 75 and (iii) 100 per cent dividend pay out ratio. Compute the market price of the company's quoted shares as per Walter's Model if it can earn a return of (a) 15, (b) 10 and (c) 5 per cent on its retained earnings. The earnings per share of a company is Rs 8 and the rate of capitalisation applicable is 10 per cent. The company has before it, an option of adopting (i) 50, (ii) 75 and (iii) 100 per cent dividend pay out ratio. Compute the market price of the company's quoted shares as per Walter's Model if it can earn a return of (a) 15, (b) 10 and (c) 5 per cent on its retained earnings.
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Financial Accounting and Reporting
ISBN: 978-0273744443
14th Edition
Authors: Barry Elliott, Jamie Elliott
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