What do you mean by share buy-back? Is it related to the dividend policy? Comment on the Indian scenario in this respect. A company earns 12% against a required rate of return of 10%. The EPS is Rs 8...

What do you mean by share buy-back? Is it related to the dividend policy? Comment on the Indian scenario in this respect.

A company earns 12% against a required rate of return of 10%. The EPS is Rs 8 with a 50% dividend pay-out ratio. Find the value of its share using: (a) Walter’s model; and (b) Gordon’s model.