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Commerce · Q35

Business Finance

Graduate and Post Graduate · Commerce · question 35

Q35

Which combination of the following represents the assumptions of the Walter's dividend model? 1.The company has a very long or perpetual life. 2. All earnings are either reinvested intemally or distributed as dividend. 3. There is no floatation cost for the company. 4. Cost of capital of the company is constant. Select the correct one:

A.
1, 2 and 3
Answer
B.
2, 3 and 4
C.
1, 2 and 4
D.
1, 3 and 4

Answer: Option A

Solution

Answer: Option A
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