ZED Ltd. is expecting to pay a dividend of 50 per share in the next financial year 2025-26. The company's speed of adjustment is 25%, the target…

CA Intermediate · Financial Management and Strategic Management · PYQS · January 2026
ZED Ltd. is expecting to pay a dividend of 50 per share in the next financial year 2025-26. The company's speed of adjustment is 25%, the target pay-out ratio is 40%, and the earnings per share (EPS) for the year amount to 200. What was the dividend paid for the financial year 2024-25 using Lintner's Model?
(A) 30 per share
(B) 40 per share
(C) 60 per share
(D) 50 per share

Suggested Answer and Working Notes:

Correct Answer: Option (B)

40 per share

Topics: Part-A: Financial Management

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