Economics · Financial Management

Consider the following statements regarding Dividend Theories: 1. According to Walter's Model, the relationship between the firm's internal rate of return (r) and its cost of equity (Ke) determines the relevance of dividend policy. 2. Gordon's Model assumes that the firm finances all investments only through retained earnings and does not use external financing. 3. Modigliani and Miller (MM) Dividend Theory argues that dividend policy is highly relevant because investors always prefer current dividends over future capital gains under perfect market conditions. 4. The 'Bird-in-the-Hand' argument supports the view that investors value certain current dividends more than uncertain future capital gains. Which of the statements given above are correct?