Q - Corp previous, expected, next, company

dvilayphet

Last year, CPK Inc. had earnings of $4.50 per share and paid a dividend of $0.70. In the current year, the company expects to earn $3.50 per share. The company has a 35% target payout ratio and plans to bring its dividend up to the target payout ratio over a 5-year period. Given the previous payout ratio was 16%, calculate the expected dividend for next year when CPK Inc. is expected to earn $2.50.