What dividend per share will they declare for fiscal year

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Question - Delta Corporation earned $2.50 per share during fiscal year 2021 and paid cash dividends of $1.00 per share. During the fiscal year that just ended on December 31, 2022, Delta earned $3.00 per share, and the firm's managers expect to earn this amount per share during fiscal years 2023 and 2024 as well.

1. What was Delta's payout ratio for fiscal year 2021?

2. If Delta's managers wish to follow a constant nominal dividend policy, what dividend per share will they declare for fiscal year 2022?

3. If Delta's managers wish to follow a constant payout ratio dividend policy, what dividend per share will they declare for fiscal year 2023?

4. If Delta's managers wish to follow a partial-adjustment strategy, with a target payout ratio equal to FY 2021's, how could they change dividend payments during 2022, 2023 and 2024?

Reference no: EM133168151

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