If ‘r’ = ‘ke’, than MP by Walter’s Model and Gordon’s Model for different payout ratios would be:

The correct answer is C. Equal.

Walter’s model and Gordon’s model are both used to calculate the value of a share of stock. Walter’s model uses the dividend growth rate, while Gordon’s model uses the earnings growth rate. If the required rate of return (r) is equal to the cost of equity (ke), then the value of a share of stock will be the same for both models, regardless of the payout ratio.

Here is a brief explanation of each option:

• Option A: Unequal. This is not the correct answer because the value of a share of stock will be the same for both models if the required rate of return (r) is equal to the cost of equity (ke).
• Option B: Zero. This is not the correct answer because the value of a share of stock will not be zero if the required rate of return (r) is equal to the cost of equity (ke).
• Option C: Equal. This is the correct answer because the value of a share of stock will be the same for both models if the required rate of return (r) is equal to the cost of equity (ke).
• Option D: Negative. This is not the correct answer because the value of a share of stock cannot be negative.