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    Dividend Adjustment Model

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    Regional Software has made a bundle selling spreadsheet software and has begun paying cash dividends. the firm's chief financial officer would like the firm to distribute 25% of its annual earnings (POR = 0.25) and adjust the dividend rate to changes in earnings per share at the rate ADJ = 0.75. Regional paid $1.00 per share in dividends last year. Use the dividend adjustment model, Equation (18.1), to calculate projected dividends per share for this year and the next four.

    (18.1) DPS1 - DPS0 = ADJ (POR(EPS1) - DPS0)

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    https://brainmass.com/business/accounting-for-corporations/dividend-adjustment-model-a10-251653

    Solution Preview

    Regional Software has made a bundle selling spreadsheet software and has begun paying cash dividends. The firm's chief financial officer would like the firm to distribute 25% of its annual earnings (POR = 0.25) and adjust the ...

    Solution Summary

    The solution analyzes a dividend adjustment model for regional software.

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