2. The Borowiak Rose Water Company expects, with some degree of certainty, to generate the following net income and to have the following capital expenditure during the next 5 years in thousands): Year 1 3 5 Net income Rs.2,000 Rs. 1,500 Rs. 2,500 Rs.2,300 Rs.1,800 Capital Expenditure 1,000 1,500 2,000 1,500 2,000 The Company currently has 1 million shares of common stock outstanding and pays dividends of Re.1 per share. a. Determine the dividends per share and external financing required in each year if dividend policy is treated as a residual decision. b. Determine the amounts of external financing in each year that will be necessary if the present annual dividend per share is maintained. 5 c. Determine the dividends per share and the amount of external financing that will be necessary if a dividend-pay-out ratio of 50 percent is maintained. 5 d. Under which of the three dividend policies; i. Aggregate dividends (total dividends over five years) maximized? 2.5 ii. External required financing (total financing over five years) minimized? 2.5