2. Over the past few years, DermaSkin has had the following earnings per share: Year Earnings Per Share 2012 $1.20 2013 $1.30 2014 $1.40 2015 -$0.70 2016 $0.80 2017 $0.50

a. If the firms dividend payout policy was a constant payout ratio of 40% when earnings were positive and 0% otherwise, what would be the annual dividend for each year?

b. If the firm had a dividend payout policy of $1.00 per share, increasing by $0.15 whenever the dividend payout fell below 50% for two consecutive years, what annual dividend would the firm pay each year?

c. What is the difference between these two policies?

Only B and C i understand A