Saraswati Glass Works has an investment of Rs 30 crore divided into 30 lakh ordinary shares. The
Fantastic news! We've Found the answer you've been seeking!
Question:
Saraswati Glass Works has an investment of Rs 30 crore divided into 30 lakh ordinary shares. The profitability rate of the firm is 20 percent and the capitalization rate is 12.5 percent. What is the optimum dividend payout for the firm is Walters model is used? What shall be the price of the share at optimum payout? Would your answer change if the profitability rate is assumed to be 15 percent? What would happen if profitability rate is 10 per cent? Show computations.
Related Book For
Accounting For Managers Interpreting Accounting Information for Decision Making
ISBN: 978-1119979678
4th edition
Authors: Paul M. Collier
Posted Date: