7 XYZ Corporation pays dividends according to 50 percent target dividend payout ratio. A couple...
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7 XYZ Corporation pays dividends according to 50 percent target dividend payout ratio. A couple of days ago it paid a $2.00 dividend on each share. The company's financial models indicate that one year from today its earning per share will reach $4.92. The Lintner's model (see Ch.19) shows how per-share dividend paid by a company depends on that company's "adjustment coefficient". In parts (a) and (b) below, calculate XYZ Corporation's per-share dividend that will be paid a year from today, if ... a. ... the adjustment coefficient is 4. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b. ... the adjustment coefficient is instead 7. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) 4 points a. Dividend b. Dividend c. Which of the two adjustment coefficients (see parts (a) and (b)) would you call more conservative? 0.4 07
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