medium · Principles of Finance cost-of-capital-structure
A firm follows a Lintner dividend model. Its target payout ratio is 40% and its partial adjustment speed is 0.30.
Last year, the firm paid a dividend of 2.00 per share. If current year earnings are 10.00 per share, what is the dividend for the current year?
- $4.00
- $3.20
- $2.00
- $2.60
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