How is gordon's formula different from walter's formula?
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. Walter’s model:
Professor James E. Walterargues that the choice of dividend policies almost always affects the value of the enterprise. His model shows clearly the importance of the relationship between the firm’s internal rate of return (r) and its cost of capital (k) in determining the dividend policy that will maximise the wealth of shareholders.
Gordon’s Model:
One very popular model explicitly relating the market value of the firm to dividend policy is developed by Myron Gordon.
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