STATE the Limitations of Walter's Model
CA Intermediate · Financial Management and Strategic Management · MTP · January 2026
STATE the Limitations of Walter's Model
Suggested Answer and Working Notes:
Limitations of Walter's Model 1. The formula does not consider all the factors affecting dividend policy and share prices. Moreover, determination of market capitalisation rate is difficult. 2. Further, the formula ignores such factors as taxation, various legal and contractual obligations, management policy and attitude towards dividend policy and so on.
Topics: Part-A: Financial Management
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