The dividend policy of Gulden Gardens Inc. can be represented by a gradual adjustment to a target dividend payout ratio. Last year Gulden had earnings per share of $4.00 and paid a dividend of $0.80 a share. This year it estimates earnings per share will be $6.00. If it has a 25% target payout ratio and uses an adjustment factor of 0.2, what would be the dividends per share for this year?

The dividend policy of Gulden Gardens Inc. can be represented by a gradual adjustment to a target dividend payout ratio. Last year Gulden had earnings per share of $4.00 and paid a dividend of $0.80 a share. This year it estimates earnings per share will be $6.00. If it has a 25% target payout ratio and uses an adjustment factor of 0.2, what would be the dividends per share for this year?

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 9DQ: The dividend yield of Suburban Propane Partners, L.P. (SPH) was 7.7% in a recent year, and the...

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