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    Dividend Adjustment Model with Annual Dividend Calculations

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    (Dividend adjustment model) Last year's dividend for Woolridge Outfitters was $1.00. This year's earnings per share are $4.00, and Woolridge's target payout ratio is 40%. Using the dividend adjustment model, Equation (18.1), what would be this year's dividend with each of the following adjustment factors?
    a. 70%
    b. 0%
    c. 100%

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    Dividend Adjustment Model Formula

    DPS1 = DPS0 * ADJ*(PR*EPS1 - ...

    Solution Summary

    The solution computes dividend with different adjustment factors.