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Author Question: GNB Inc. sets its dividend using the target payout model. Using the data in the table, below, ... (Read 50 times)

Alainaaa8

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Question 1

Gecko & Co. uses the residual dividend model to set its dividends. Selected financial information for Gecko is provided in the table below.

Selected Financial Information
Gecko & Co.
Net income$32 million
Investments$36.9314 million
Dividends per Share$0.40 
Shares Outstanding15.37 million
What is Gecko's capital structure weight for equity?
◦ 0.30
◦ 0.40
◦ 0.50
◦ 0.60
◦ 0.70

Question 2

GNB Inc. sets its dividend using the target payout model. Using the data in the table, below, calculate the dividend for Year 1.

Selected Financial Information
GNB Inc.
Dividend per share Year 0$1.446
Target Payout Rate35%
Earnings per share Year 0$3.50
Earnings per share Year 1$3.35
Adjustment factor0.15

◦ $1.296
◦ $1.397
◦ $1.436
◦ $1.438
◦ $1.446


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Marked as best answer by Alainaaa8 on Apr 25, 2021

Ahernandez18

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Alainaaa8

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Reply 2 on: Apr 25, 2021
Thanks for the timely response, appreciate it


Animal_Goddess

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Reply 3 on: Yesterday
Excellent

 

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