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(i) No External Financing: - Walter' model presume that the firm's investment are financed exclusively by retained earnings and no external financing is used. If it was therefore then the model would be applicable to only those firms in which equity was the only source of finance.
(ii) Constant Rate of Return: - The model presumes that r is constant. This isn't a realistic assumption because when increased investments are made by the firm r as well changes.
(iii) Constant Equity Capitalisation Rate (Ke) :- The model presume that equity capitalization rate remains constant. This is as well not a realistic assumption because equity capitalization rate changes directly with the change in risk complexion of the firm.
Clearing and Settlement The Treasury Bills are available in physical form if an investor desires so. The market is mostly dominated by institutional players who have a facility
the nu-nu brothers inc. (NNBI) has the following capital structure,
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