Question

please complete A,B,&C

thank you in advance!

Alternative dividend policies Over the last 10 years, a firm has had the earrings per share shown in the following table on Help a. If the firm's dividend policy were based on a constant payout ratio of 40% for years with positive comings and otherwise, what would be the annual dividend for 2012? b. If the frm had a dividend payout of $1.00 per share increasing by $0.10 per share whenever the dividend payout fell below 50% for two consecutive years, what annual dividend would the firm pay in 2012? c. the firm's policy were to pay $0.50 per here each period opt when earrings per share exceed $3.00, when andra dividend equal to 80% of eaming beyond $3.00 would be paid what annual dividend would the d. Discuss the pros and cons of each dividend policy described in parts a through e. If the firm's dividend policy were based on a constant payout ratio of 40 for all years with positive earrings and otherwise, the annual dividend for 2012 (ound to the nearest cart) pay in 2012 Data Table Click on the con located on the top right comer of the datatable below in order to copy contents into a spreadsheet) Earnings per share Year Earnings per share $1.41 2012 10.29

Answer 1

a). Annual dividend for 2012 = 40%*earnings = 40%*1.25 = $0.50 per share

b). For Years 2010 and 2011, $1 dividend is more than 50% payout ratio, so, dividend for Year 2012 would be $1.00 per share.

c). Earnings in 2012 are less than $3 so dividend paid would be $0.50 per share.