4. Sahu & Co. earns `6 per share having capitalisation rate of 105 and a Rate of Return on Investment at the rate of 20%. According to Walter’s Model what will be the price per share at 30% dividend payout ratio? Is this the optimum payout ratio as per Walter?

[C.A Final Nov. 2002]

[Ans. P = `102, No, Optimal is Zero.]