17·8B. (Dividend policies) The earnings for Carlson Cargo, Inc., have been predicted for the next live years and are listed in the following table. There are 1 million shares outstanding.

Detennine the yearly dividend per share to be paid if the following policies are enacted:

a.ı Constant dividend payout ratio of 40 percent.

b. Stable dollar dividend targeted at 40 percent of the earnings over the five-year period.

c.ı Small, regular dividend of $0.50 per share plus a year-end extra when the profits in any year exceed $1,500,000. The year-end extra dividend will equal 50 percent of profits exceeding $1,500,000.

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YEAR 1 J PROFITS AFTER TAXES $1,500,000 2,000,000 1,750,000 950,000 2,500,000