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    Dividend Adjustment Model

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    Last year's dividend for Woolridge Outfitters was $1.00. This year's earnings per share are $4.00, and Woolridge's payout ratio is 40%. Using the dividend adjustment model shown below, what would be this year's dividend with each of the following adjustment factors? a. 70% b. 0% c. 100%

    dividend adjustment model

    DPS - DPS = ADJ[POR(EPS ) - DPS ]
    1 0 1 0

    (the numbers on the second line are lower numbers that go to the right and directly under the letters - it is difficult to type the problem)

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    Solution Summary

    This solution illustrates how to predict dividends using the Dividend Adjustment Model.

    $2.19