Test
Walter's and Gordon's Model
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Preguntas del test (13)
1Total earnings = 1,00,000; No of equity shares = 1,00,000 of Rs.10 each; Price Earning Multiple = 8 times. What is the optimum payout ratio assuming 100% payout ratio?
- A0%
- B100%
- CIndifferent
2Profit before Tax = 10,00,000; Tax Rate = 50%; No of shares of Rs.10 each =50,000; 10% Preference capital = 10,00,000; Reserves and Surplus = Rs.45,00,000; Fictitious assets = 10,00,000. How much is ROE?
- A80%
- B8%
- C40%
- D10%
3The company has paid out Dividend of Rs.3 per share based on payout ratio of 50%. Earnings and Dividend will grow at 20 percent for four years. Growth will fall to 10 percent in year 5 and dividend payout ratio will increase to 60%. Cost of equity of the company is 20%. What should be the MPS at the end of year 5?
- ARs.90.30
- BRs.75.20
- CRs.82.10
- DRs.68.40
4Investors's required rate of return is ___________________?
- ACost of equity
- BReturn on equity
- CInternal Rate of Return
5EPS = Rs.10; Payout ratio = 25%; Cost of equity = 10%; Return on equity = 5%. What is the price of share as per Walter's model?
- ARs.100
- BRs.200
- CRs.175
- DRs.62.50
6The current share price is Rs.100. Long term growth of 8% is expected. Company is expected to pay a divided of Rs.4 per share next year. What rate of return does an investor expect?
- A8%
- B12%
- C12.32%
- D4.32%
7Book value per share = Rs.100; DPS = Rs.4; Payout ratio = 25%. How much is ROE?
- A4%
- B1%
- C16%
- D8%
8The company is paying Dividend of Rs.2 per share. Dividends are currently taxable and investor expects return of 10%. Tax rate is 20%. Dividends have now become exempt but due to imposition of DDT dividend is expected to be 1.80. What will be the price before and after imposition of DDT
- ARs.20 and Rs.18
- BRs.16 and Rs.18
- CRs.20 and Rs.22.5
- DRs.16 and Rs.22.5
9EPS (100% payout) = Rs.10; MPS = Rs.100. The company is fully equity financed. The company plans to do a project Rs.1 Cr at end of year 1. It will generate Rs.21 lacs from year 2 onwards. How much is project NPV?
- ARs.1.1 Crores
- BRs.1 Crores
- CNegative 79 lacs
- DNone of the above
10Dividend per share is Rs.2. An investor owns 500 shares of company. He wants to continue to earn same amount of dividend income ever year. Dividends will not be paid for next three years. Dividend of year 4 is likely to be Rs.2.50. Growth rate is 7% and cost of equity is 8%. How many shares are to be sold in year 2 to get the minimum amount?
- A4 shares
- B3 shares
- C8 shares
- D5 shares
11IRR of company = 20%;
Investor's required rate of return = 15%
Dividend = Rs.2 per share; EPS = Rs.5 per share. What will be the growth rate?- A8%
- B12%
- C6%
- D9%
12Return on equity = 20%; Cost of equity = 15%; DPS = 10. What will be the limiting value as per walter's model?
- A50
- B66.67
- C88.89
- D60
13MPS of company = Rs.100; EPS of company = Rs.8; Cost of equity = 10%. What is present value of growth opportunities?
- A80
- B20
- C100
- D50
Información
- Descripción
- Chartered Accountancy Strategic Financial Management Test sobre Walter's and Gordon's Model, creado por Dinesh Jain el 30/10/2019.
- Autor
- Dinesh Jain
- Idioma
- English
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- 2.701
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