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Commerce · Q165

Business Finance

Graduate and Post Graduate · Commerce · question 165

Q165

Who formulated the following model for estimating the market price of equity share? P = D + R_AR_C ( E - D )R_C Where, P = Market price of equity share D = DPS E = EPS E - D = Retained earnings per share RA = Internal rate of return on investment RC = Cost of capital

Who formulated the following model for estimating the market price of equity share?

Where,
P = Market price of equity share
D = DPS
E = EPS
E - D = Retained earnings per share
RA = Internal rate of return on investment
RC = Cost of capital
A.
Modigliani-Miller
B.
Myron-Gordon
C.
James E. Walter
Answer
D.
Clarkson and Elliot

Answer: Option C

Solution

Answer: Option C
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