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Does Dividend has no relationship with the value of the firm as per Walter Model.?

According to Walter's Model, the relationship between dividends and the value of a firm is contingent on the firm's internal rate of return (r) compared to the required rate of return (k). If the internal rate of return exceeds the required rate, retaining earnings for reinvestment enhances firm value, suggesting that dividends may detract from it. Conversely, if the required return is greater than the internal rate, paying dividends can increase firm value. Thus, the model suggests a nuanced relationship between dividends and firm value rather than asserting that there is no relationship at all.


What is value of the firm under MM theory?

Under Modigliani-Miller (MM) theory, the value of a firm is determined by its earning power and the risk of its underlying assets, rather than its capital structure or the way it is financed. In a perfect market, the value of the firm remains constant regardless of whether it is financed by equity or debt. This is because investors can create their own leverage by borrowing on their own account, thus making the firm's capital structure irrelevant to its overall value. However, this theory holds true only under certain assumptions, such as no taxes, no bankruptcy costs, and perfect information.


What can happen if the MRP is greater than a firm's MC?

The firm can afford to hire more workers.


How many times the word firm in the bible?

The word 'firm' appears eight (8) times in the KJV Bible.


What is the definition for sternly?

Firm or unyielding, uncompromising.

Related Questions

Why would an entrepreneur prefer to launch an entirely new venture rather than buy an existing firm?

the firm might have a bad track record


Is insight group plc a legitimate company?

Insight Group PLC is a legitimate company, based in Cape Town, South Africa. A similar company called Insight Group, without the PLC however is NOT. Insight Group PLC is a private equity and partnership firm, where Insight Group is a property company from Australia.


Why might entrepreneur prefer to lunch an entirely new venture rather than buy an existing firm?

If he buys an existing firm, notwithstanding it's possible potential, he is also buying it's inherent problems. If he founds a new firm, he at least does not inherit any potential problems.


When firm is considering how its goods will be produced what must it first consider?

how to best use the land to which it has access


How is the Paralegal profession faring in today's economy. I am considering obtaining a Paralegal Certificate at San Francisco State, and while I know you cannot see 18 months into the future, I hope you can provide insight to me, a 61 year old ?

I think that a Paralegal Certificate will go a long way in today's economy because a law firm will consider it over other candidates who don't, also if you wind up working for a law firm, you can built up on your experience there by taking courses that the firm might require you to take and who knows maybe you become a lawyer at some point, this solely depends on you, and your work ethic and if you have the willingness to learn, I believe you can achieve anything.


What is Rather firm in consistency pertaining to fluid?

'thickish' i think is answer


What is The Startup Cost for a Venture Capital and Equity Firm?

For any venture capital firm, its access to capital and investors that's key. Other individual's cash and less your own, considering starting costs that might be connected having a physical operation & overhead expenses, just as with any company and can rely on location.


Why might span of control differ from one firm to another?

this i a way of controlling members of a firm from the manager


At what levels might a firm get involved in international trade?

There is a few reasons why a firm might get involved in international trade. It would help there company grow and it will help with global.


When a firm is considering how its goods will produced what must it first consider?

how to best use the land to which it has access


How might a firm benefit from delaying its cash outflows?

h


Which is the best law firm in Utah?

Impossible to answer. There are many. You might ask what is the biggest law firm in Utah.