Hi sir,
Lintner’s model formula given by you is:
Change in DPS= change in EPS X target payoutX adjustment factor.
So if we solve this question by this formula answer is coming USD0.80 But the answer is given USD 0.68 and the formula also given is different ie they are reducing the previous dividend after multiplying expected earning and target ratio and then multiplying with adjustment factor.
Kindly look into this and let me know which formula to follow.
Thank you
Please go with the formula given by the institute only.