7. The following data relate to a firm in the cotton textile industry: Share capital (at 10 per share) Reserve Profit after tax Dividends paid P/E ratio in crore 12.50 7.50 1.85 1.50 13.33 You are required

(a) to comment on the firm's dividend policy using the Walter's model;

(b) to determine the optimum payout ratio using the Walter's model;

(c) to determine the price-earnings ratio at which dividend payout will have no effect on share price.