The details regarding three companies are given below: X Ltd r = 12% Ke = 10% E = Rs. 100 Y Ltd r = 8% Ke = 10% E = Rs. 100 Z Ltd. r = 10% Ke = 10% E = Rs. 100 Compute the value of an equity share of each of these companies applying Walter's formula when the dividend pay-out ratio is (a) 0%, (b) 20%, (c) 40%, d) 60%
The details regarding three companies are given below: X Ltd r = 12% Ke = 10% E = Rs. 100 Y Ltd r = 8% Ke = 10% E = Rs. 100 Z Ltd. r = 10% Ke = 10% E = Rs. 100 Compute the value of an equity share of each of these companies applying Walter's formula when the dividend pay-out ratio is (a) 0%, (b) 20%, (c) 40%, d) 60%
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Transcribed Image Text:The details regarding three companies are given below:
X Ltd
r = 12%
Ke = 10%
E = Rs. 100
Y Ltd
r = 8%
Ke = 10 %
E = Rs. 100
Z Ltd.
r = 10%
Ke = 10 %
E = Rs. 100
Compute the value of an equity share of each of these companies applying Walter's formula when the dividend pay-out ratio is (a) 0%, (b) 20%, (c) 40%, d) 60%
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