Last year, Luna Inc. had earnings of $2.00 per share and paid a regular dividend of $0.40. For the current year, the company anticipates earnings of $2.80. It has a 30 percent target payout ratio and uses a 5-year period to adjust the dividend. Compute the expected dividend for the current year.

Last year, Luna Inc. had earnings of $2.00 per share and paid a regular dividend of $0.40. For the current year, the company anticipates earnings of $2.80. It has a 30 percent target payout ratio and uses a 5-year period to adjust the dividend. Compute the expected dividend for the current year.

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 55E: Rebert Inc. showed the following balances for last year: Reberts net income for last year was...

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Do fast this question answer general Accounting

Last year, Luna Inc. had earnings of $2.00
per share and paid a regular dividend of
$0.40. For the current year, the company
anticipates earnings of $2.80. It has a 30
percent target payout ratio and uses a 5-year
period to adjust the dividend. Compute the
expected dividend for the current year.

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