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Which of the following is/are the limitation(s) of Walter model on dividend policy?

Which of the following is/are the limitation(s) of Walter model on dividend policy?

Which of the following is/are the limitation(s) of Walter model on dividend policy?


I. Exclusive financing by retained earnings makes the model suitable only for all equity firms.
II. In case of high investments the return on investment will not be constant.
III. The business risk of the firm has a direct impact on the value of the firm, thus cost of equity capital cannot be constant.


[A]Only (I) above
[B]Only (II) above
[C]Both (I) and (II) above
[D]All (I), (II) and (III) above

Roshan kumar 27-Dec-2017

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