Ripper Filtration Inc. designs domestic water filters that remove fluo

Ripper Filtration Inc. designs domestic water filters that remove fluoride. Selected financial data is provided in the table below. Ripper is trying to set the dividend for the Year 2 using the target payout model.

Selected Financial Information
Ripper Filtration Inc.
Dividend per share (Year 1 ) $0.55
Target payout ratio 20%
Earnings per share (Year 1 ) $1.80
Earnings per share (Year 2 ) $2.45
Adjustment Factor 1

A) $0.55
B) $0.57
C) $0.59
D) $0.64
E) $0.68

ANSWER

E