The following figures are collected from the annual report of XYZ Ltd.: Net Profit 30 lakhs Outstanding 12% preference shares No. of equity shares 100 lakhs 3 lakhs Return on Investment 20% Cost of Equity (Ke) 16% What should be the approximate dividend pay-out ratio so as to keep the share price at ? 42 by using Walter model?
The following figures are collected from the annual report of XYZ Ltd.: Net Profit 30 lakhs Outstanding 12% preference shares No. of equity shares 100 lakhs 3 lakhs Return on Investment 20% Cost of Equity (Ke) 16% What should be the approximate dividend pay-out ratio so as to keep the share price at ? 42 by using Walter model?
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 33MCQ: Selected information for Berry Company is as follows: Berrys return on equity rounded to the nearest...
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![The following figures are collected from the annual report of XYZ Ltd.:
Net Profit
30 lakhs
Outstanding 12% preference shares
100 lakhs
No. of equity shares
3 lakhs
Return on Investment
20%
Cost of Equity (Ke)
16%
What should be the approximate dividend pay-out ratio so as to keep the share price at ? 42 by using
Walter model?
Solution](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F1e9bab9b-c007-4f9b-9694-7885f4c33b35%2F69f20c90-5be7-49db-a870-c364c6d3ed57%2F6m20tvs_processed.png&w=3840&q=75)
Transcribed Image Text:The following figures are collected from the annual report of XYZ Ltd.:
Net Profit
30 lakhs
Outstanding 12% preference shares
100 lakhs
No. of equity shares
3 lakhs
Return on Investment
20%
Cost of Equity (Ke)
16%
What should be the approximate dividend pay-out ratio so as to keep the share price at ? 42 by using
Walter model?
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