The formula to determine the market value of a share according to Walter's model can be written as: P = D/k + {r ×(E-D)/k}/k. and r = Internal rate of return of the company.

What is Walter formula?

Walter's Model Valuation Formula and its Denotations

Walter's formula to calculate the market price per share (P) is: P = D/k + {r*(E-D)/k}/k, where. P = market price per share. D = dividend per share. E = earnings per share.

Which is Walter formula for dividend policy Mcq?

Walters model on dividend policy assumes that equal to current assets plus current liabilities including bank borrowings. Walter's model shows the relevance of dividend policy and its bearing on the value of the share.