The Sharpe Co. just paid a dividend of $1.70 per share of stock. Its target payout...

 

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The Sharpe Co. just paid a dividend of $1.70 per share of stock. Its target payout ratio is 50 percent. The company expects to have an earnings per share of $4.81 one year from now. a. If the adjustment rate is .3 as defined in the Lintner model, what is the dividend one year from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Dividend b. If the adjustment rate is .6 instead, what is the dividend one year from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Dividend c. Which adjustment rate is more conservative? 36 O O The Sharpe Co. just paid a dividend of $1.70 per share of stock. Its target payout ratio is 50 percent. The company expects to have an earnings per share of $4.81 one year from now. a. If the adjustment rate is .3 as defined in the Lintner model, what is the dividend one year from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Dividend b. If the adjustment rate is .6 instead, what is the dividend one year from now? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Dividend c. Which adjustment rate is more conservative? 36 O O

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Lintner Model Dividend Calculation The Lintner model helps estimate future dividends based on a comp... View the full answer