Walter's Model suggests for 100% DP Ratio when ______________.

k_{e}

= r

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k_{e}

< r

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k_{e}

> r

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k_{e}

= 0

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Solution

The correct option is B $k_{e}$ > r
Walter's model supports the principle that dividends are relevant. The investment policy of a firm cannot be separated from its dividend policy and both are inter-related.
When $k_{e} >$ r, the DP ratio and the value of shares are positively correlated. As the D/P ratio increases, the market price of the shares also increases. The optimum payout ratio is 100%.

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two electrons held at distance r are released from rest . maximum kinetic energy obtained by electron is _.

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A. Zero

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