📢 Too many exams? Don’t know which one suits you best? Book Your Free Expert 👉 call Now!


    Question

    According to Walter’s Model, a firm with high return

    on investment (RoI) and low cost of capital should:
    A Distribute full profits Correct Answer Incorrect Answer
    B Follow a stable dividend policy Correct Answer Incorrect Answer
    C Retain entire earnings Correct Answer Incorrect Answer
    D Pay intermittent dividends Correct Answer Incorrect Answer

    Solution

    Walter’s model states that firms with RoI > cost of capital should reinvest earnings, as this maximizes shareholder wealth.

    Practice Next
    ask-question

    Not sure which exam is best for you Talk to our expert

    Get My Free Call