Answered: 10 percent b. 25 percent c. 60 percent…

Business

Finance

10 percent b. 25 percent c. 60 percent d. 80 percent

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter14: Security Structures And Determining Enterprise Values

Section: Chapter Questions

Problem 12EP

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Question

The EPS of a company is Rs 20 and discount rate is 15 percent. Retained earning can be employed to earn a return of 13%. If the dividend payout ratios of 10%, 25%, 60% and 80% are considered, which of these will maximise the value?(Use walter)

10 percent

25 percent

60 percent

80 percent

Definition Definition Remaining net income of the company after the required dividends are paid to shareholders. This surplus money is usually invested back into the business to expand its business operations or launch a new product.

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