Match the statements in List-I with dividend models in List-II as follows:

List-I List-II

a. Dividend Capitalization Approach 1. Traditional Model

b. Dividend policy has a bearing on the share valuation 2. Gordon Model

c. Stock market places more weight on dividends than on retain earnings 3. Walter Model

d. Dividend payout is irrelevant to the value of the firm 4. Modigliani and Miller Model

A) a-2, b-3, c-1, d-4 B) a-1, b-2, c-4, d-3 C) a-4, b-1, c-3, d-2 D) a-3, b-4, c-2, d-1

Answer & Solution

Correct Answer: Option A

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List-I	List-II
a. Modigliani Miller approach	1. Commercial papers
b. Net operating income approach	2. Working capital management
c. Short-term money market instrument	3. Capital structure
d. Factoring	4. Arbitrage

List-I	List-II
a. Dividend Capitalization Approach	1. Traditional Model
b. Dividend policy has a bearing on the share valuation	2. Gordon Model
c. Stock market places more weight on dividends than on retain earnings	3. Walter Model
d. Dividend payout is irrelevant to the value of the firm	4. Modigliani and Miller Model