Q5. Determine the market value of equity shares of the company from the below mentioned information:

Earnings of the Company -Rs 10,00,000

Dividend Paid -6,00,000

Number of shares outstanding -1,00,000

Price earnings ratio -8

Rate of return on investment -15%

As a finance consultant are you satisfied with the current dividend policy of the firm? From your Viewpoint what should be the optimal dividend payout ratio? Suggestions and calculations need to be provided based upon Walters Dividend relevance model. (5Marks)

(Don't Use Financial calculator)