2. The Argo Pamphlet Companys dividend payout ratio is 35%. It is currently paying an annual dividend

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2. The Argo Pamphlet Company’s dividend payout ratio is 35%. It is currently paying an annual dividend of $1.30.

a. What is Argo’s EPS?

b. What is the market price of Argo’s stock if its P/E ratio is 14?

c. How much current income per share will stockholders lose if Argo cuts its payout ratio to 20% and nothing else changes?

d. If the change in payout ratio does not affect the stock’s price, approximately how many shares would a stockholder who owns 1,000 shares have to sell to make up her loss in current income? Ignore tax effects and transaction costs.

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Practical Financial Management

ISBN: 9780324422634

5th Edition

Authors: William R. Lasher

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Question Posted: Oct 18, 2024 04:01 AM

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2. The Argo Pamphlet Companys dividend payout ratio is 35%. It is currently paying an annual dividend

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Practical Financial Management

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