Walter’s Model suggests that a firm can always increase i.e., of the share by:

Increasing Dividend
Decreasing Dividend
Constant Dividend
None of the above

The correct answer is: A. Increasing Dividend.

Walter’s Model suggests that a firm can always increase the price of its shares by increasing its dividend. This is because investors are willing to pay more for a share of a company that pays a higher dividend. The higher dividend indicates that the company is profitable and is able to return money to its shareholders.

Decreasing or keeping the dividend constant will not necessarily lead to an increase in the price of the shares. This is because investors may not be willing to pay more for a share of a company that is not paying a dividend or is paying a lower dividend.

Here is a brief explanation of each option:

  • Option A: Increasing Dividend. This is the correct answer. As explained above, increasing the dividend will lead to an increase in the price of the shares.
  • Option B: Decreasing Dividend. This is not the correct answer. Decreasing the dividend may lead to a decrease in the price of the shares.
  • Option C: Constant Dividend. This is not the correct answer. Keeping the dividend constant may not lead to an increase in the price of the shares.
  • Option D: None of the above. This is not the correct answer. Option A is the correct answer.
Exit mobile version