Largo Corp. has paid quarterly dividends of $0.70 per share for the last three years and is trying to continue this tradition. Largo€™s balance sheet is as follows:

Largo€™s net income in 2008 was $400,000. Should Largo continue its $0.70 per share quarterly dividend in the first quarter of 2009? Should Largo increase the cashdividend?

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Largo Corp. Balance Sheet December 31, 2008 Assets Liabilities Current assets. Current liabilities: Cash Accounts recelvable Inventory Total current asset:s $ 50,000 450,000 1,200,000 $1,700,000 Accounts payable Taxes payable Accrued llablitles $520,000 100,000 90,000 Total current liabilities $710,000 1,500,000 500,000 Bonds payable 1,600,000 Investments Property, plant, and equipment (net) Total lablities $2,210,000 Stockholders' Equity Common stock ($1 par, 69.000 shares $69,000 621,000 900,000 $1,590,000 $3.800,000 Tol labilities and stockholders' equlty $3,800,000 outstanding) Additional pald-In capital Retained eamings Total stockholders equity Total assets