2009 2010 2011 2012 2013 2014 2015 Dillard Department Store: EPS............................. $0.69 $0.93 $1.38 $1.82 $2.29 $2.35 $2.50 DPS............................. $0.05 $0.05 $0.08 $0.09 $0.10 $0.12 $0.13 Payout ratio ................. 7.3% 5.4% 5.8% 5.0% 4.4% 5.1% 5.2% Dollar General: ................ EPS............................. $0.38 $0.61 $0.81 $1.10 $0.95 $0.23 $0.30 DPS............................. $0.09 $0.11 $0.13 $0.17 $0.20 $0.20 $0.20 Payout ratio ................. 23.7% 18.0% 16.1% 15.5% 21.1% 87.0% 66.7% Limited, Inc.:.................... EPS............................. $0.10 $0.19 $0.37 $0.51 $0.80 $1.21 $1.40 DPS............................. $0.01 $0.02 $0.04 $0.08 $0.11 $0.16 $0.24 Payout ratio ................. 10.0% 10.5% 10.8% 15.7% 13.8% 13.2% 17.1% Nordstrom, Inc.:............... EPS............................. $0.35 $0.38 $0.54 $0.55 $0.66 $0.91 $1.10 DPS............................. $0.06 $0.06 $0.07 $0.10 $0.11 $0.13 $0.18 Payout ratio ................. 17.1% 15.8% 13.0% 18.2% 16.7% 14.3% 16.4% J.C. Penney:.................... EPS............................. $2.75 $2.94 $3.13 $2.91 $2.66 $3.53 $4.70 DPS............................. $0.92 $1.00 $1.08 $1.18 $1.18 $1.24 $1.48 Payout ratio ................. 33.5% 34.0% 34.5% 40.6% 44.4% 35.1% 31.5% Wal-Mart Stores: ............. EPS............................. $0.16 $0.23 $0.35 $0.48 $0.58 $0.80 $1.10 DPS............................. $0.02 $0.02 $0.04 $0.05 $0.07 $0.09 $0.12 Payout ratio ................. 12.5% 8.7% 11.4% 10.4% 12.1% 11.3% 10.9%

Figure 2 Selected financial data, other retail chains Note: DPS refers to dividends per share, EPS to earnings per share.

Mr. Clarence Autry, who was also on the board of directors of the Exxon corporation and no stranger to the world of corporate finance, broke in. Young man, he said dryly, your proposal ignores reality. Its not whether the stockholders are theoretically better off that counts, its what they want. You cannot tell the stockholders youre doing whats best for them by cutting the dividend; the dividend is what they want. Not only is that dividend sure money in their pockets now, but the fact that its the same size as last time, or even higher, is a signal to them that their company is doing well and will continue to do so in the future. These decisions cant always be made on the basis of good-looking formulas from the back room, you know. Ms. Barbara Reynolds, who was the head of directors auditing committee, and somewhat of an accounting expert, agreed with Mr. Autry. Thats a good point, Clarence, and one thats well recognized by our competitors, too. If you check, I dont think youll find a single one of them thats cut their dividend in the last six