1. Coppell Timber Company had total earnings last year of $5,000,000, but expects total earnings to drop to $4,750,000 this year because of a slump in the housing industry. There are currently 1,000,000 shares of common stock outstanding. The company has $4,000,000 worth of investments to undertake this year. The company finances 40 percent of its investments with debt and 60 percent with equity capital. The company paid $3.00 per share in dividends last year. a. If the company follows a pure residual dividend policy, how large a dividend will each shareholder receive this year? b. If the company maintains a constant dividend payout ratio each year, how large a dividend will each shareholder receive this year? c. If the company follows a constant dollar dividend policy, how large a dividend will each shareholder receive this year?

3. Worthington, Inc. is planning to issue $7,500,000 in 120-day maturity notes carrying a rate of 11 percent per year. Worthingtons commercial paper will be placed at a cost of $35,000. What is the effective cost of credit to Worthington?

Please answer the 2 questions in a essay format. The last tutor I used , the answers I got failed across the board! Please help if you can actually help with the material!

Thank you!