Because SDI’s recent financial performance has not been good, Tony and many other analysts expect the company to cut the annual dividend in 1997. In a meeting with analysts, management indicated that such a cut was being considered. Tony thinks the dividend will drop from $0.52 in 1996 to $0.20 in 1997. If his forecasts are borne out, then earnings would support a dividend growth rate, after the initial 1997 cut of 20 percent for the period 1998 to 2001