Dividend Policy: Walter Model - Part 2

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A Company has 100,000 equity shares of Rs. 10 each. The company expects its earnings at Rs. 750,000 and cost of capital at 10% for the next financial year. Using Walter’s model, what dividend policy will you recommend when the rate of return on investment of the company is estimated at 8% and 12% respectively? What will be the price of equity share if your recommendations are accepted?
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