A company uses a 50 % dividend payout ratio to pay its dividends. Just a few days
Fantastic news! We've Found the answer you've been seeking!
Question:
A company uses a 50 % dividend payout ratio to pay its dividends. Just a few days ago it paid a $1.70 per-share dividend. One year from now the company expects its earning per share to reach $4.81. Recall the Lintner's model . What does the model predict per-share dividend to be depending on that company's "adjustment coefficient"? Calculate the company's next year's per-share dividend if ... |
a. | the adjustment coefficient equals .3. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
b. | the adjustment coefficient equals .6. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) |
c. | Which of the two adjustment coefficients (see above) would you call more conservative? |
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
Posted Date: