{"id":46214,"date":"2024-04-15T22:09:08","date_gmt":"2024-04-15T22:09:08","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=46214"},"modified":"2024-04-15T22:09:08","modified_gmt":"2024-04-15T22:09:08","slug":"walters-model-suggests-for-100-dp-ratio-when","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/walters-model-suggests-for-100-dp-ratio-when\/","title":{"rendered":"Walter&#8217;s Model suggests for 100% DP Ratio when:"},"content":{"rendered":"<p>[amp_mcq option1=&#8221;ke = r&#8221; option2=&#8221;ke < r\" option3=\"ke > r&#8221; option4=&#8221;ke = 0&#8243; correct=&#8221;option1&#8243;]<!--more--><\/p>\n<p>The correct answer is: <strong>A. ke = r<\/strong><\/p>\n<p>Walter&#8217;s model suggests for 100% DP Ratio when the cost of equity (ke) is equal to the rate of return (r). This is because when ke = r, the company is earning a return on its investment that is equal to the cost of that investment. This means that the company is not making any profit or loss on its investment, and the DP Ratio will be 100%.<\/p>\n<p>Option B is incorrect because if ke &lt; r, the company is earning a return on its investment that is less than the cost of that investment. This means that the company is making a loss on its investment, and the DP Ratio will be less than 100%.<\/p>\n<p>Option C is incorrect because if ke &gt; r, the company is earning a return on its investment that is greater than the cost of that investment. This means that the company is making a profit on its investment, and the DP Ratio will be greater than 100%.<\/p>\n<p>Option D is incorrect because if ke = 0, the company is not earning any return on its investment. This means that the company is not making a profit or loss on its investment, and the DP Ratio will be 0%.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>[amp_mcq option1=&#8221;ke = r&#8221; option2=&#8221;ke < r\" option3=\"ke > r&#8221; option4=&#8221;ke = 0&#8243; correct=&#8221;option1&#8243;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-46214","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.2 (Yoast SEO v23.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Walter&#039;s Model suggests for 100% DP Ratio when:<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/walters-model-suggests-for-100-dp-ratio-when\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Walter&#039;s Model suggests for 100% DP Ratio when:\" \/>\n<meta property=\"og:description\" content=\"[amp_mcq option1=&#8221;ke = r&#8221; 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