Analysis of Dividend Safety
The expected increase in dividends for MMS is *closest* to:
Correct!
The equation to calculate the expected increase in dividends is:
>$$(\mbox{Expected earnings} \times \mbox{Target payout ratio} - \mbox{Previous Dividend}) \times \mbox{Adjustment factor}$$
>$$(2.45 \times 0.60 - 1.075) \times 0.20 = 0.079$$.
Incorrect.
The adjustment factor accounts for the fact that this change is spread out over five years
Incorrect.
The increase in the dividend is projected over five years.
INR 0.08.
INR 0.17.
INR 0.29.
