Walter-s Model suggests 100- DP Ratio when -k-e rk-e - 0k-e - r

Question

Walter-s Model suggests 100- DP Ratio when -k-e  rk-e - 0k-e - r

Toppr Admin · Accepted Answer

Walter-apos-s model supports the principle that dividends are relevant- The investment policy of a firm cannot be separated from its dividend policy and both are inter-related-When ke-gt- r- the DP ratio and the value of shares are positively correlated- As the D-P ratio increases- the market price of the shares also increases- The optimum payout ratio is 100-

Walter's Model suggests for 100% DP Ratio when ______________.ke < rke > rke = 0ke = r

Walter's Model suggests for 100% DP Ratio when ______________.
$k_{e}$ < r
$k_{e}$ > r
$k_{e}$ = 0
$k_{e}$ = r