Question
The management team of Netflix maintains a stable dividend using the Lintner model: Dt+1 = Dt + EPS Target Payout Where Dt (Dt+1) = dividend
The management team of Netflix maintains a stable dividend using the Lintner model: Dt+1 = Dt + EPS Target Payout Where Dt (Dt+1) = dividend in the current period t (the next period t + 1) EPSt = earnings per share in period t EPS = EPSt+1 EPSt = change in EPS Target Payout = target payout ratio = 60% = adjustment factor = 0.12 Last quarter, the dividend was $0.8 per share and the earnings per share were $10.50. The management is forecasting that earnings in the upcoming quarter will increase to $11.30 per share. What dividend for next quarter should analysts predict?
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