Marks plc and Spencer plc both base their dividend policy on the Lintner model. Both firms have
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Question:
Marks plc and Spencer plc both base their dividend policy on the Lintner model. Both
firms have a target payout rate of Marks plcs adjustment rate is and Spencer
plcs adjustment rate is Both firms paid a dividend of pence per share in
and have identical EPS in recent years:
Year
EPS pence
Required:
i Calculate the annual dividend per share and the actual payout ratio for both firms.
ii Explain the Lintner model and the function of the adjustment rate.
iii Define and explain the clientele effects and the signalling effects of dividend policy.
Related Book For
College Physics
ISBN: 978-0495113690
7th Edition
Authors: Raymond A. Serway, Jerry S. Faughn, Chris Vuille, Charles A. Bennett
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