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The Sharpe Co. just paid a dividend of $1.20 per...

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The Sharpe Co. just paid a dividend of $1.20 per share of stock. Its target payout ratio is 34 percent. The company expects to have an earnings per share of $4.90 one year from now. Requirement 1: If the adjustment rate is .45 as defined in the Lintner model, what is the dividend one year from now? (Do not include the dollar sign ($). Round your answer to 3 decimal places. (e.g., 32.161)) Dividend $ Requirement 2: If the adjustment rate is .75 instead, what is the dividend one year from now? (Do not include the dollar sign ($). Round your answer to 3 decimal places. (e.g., 32.161)) Dividend $ Requirement 3: Which adjustment rate is more conservative?

 

Paper#11914 | Written in 18-Jul-2015

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