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 = 40%
= adjustment factor = 0.15
Last quarter, the dividend was $0.6 per share and the earnings per share were $15.30. The management is forecasting that earnings in the upcoming quarter will decrease to $14.40 per share.
What dividend for next quarter should analysts predict?
Make your answer accurate to cents. That is, if your answer is 9.252, write 9.25. Also, do not include symbols (%,$) in your answer.
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