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ASSUME NUMBER OF SHARE IS 10,000 ILL TEST- 15 MARKS (1 HOUR) Question One The financial statements of ABC Company show earnings of Tshs 5,000,000
ASSUME NUMBER OF SHARE IS 10,000
ILL TEST- 15 MARKS (1 HOUR) Question One The financial statements of ABC Company show earnings of Tshs 5,000,000 for the current year. As per the policy, a retention rate is 40 %, the Equity capitalization rate is 12% and the Rate of return on investment is Required a. What would be the Market value per share as per Walter's model? (2.5 Mark) b. What is the optimum dividend payout ratio according to Walter's model and the market value of the Company's share at that payout ratio? (2.5 Mark)Step by Step Solution
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