5. Alternative dividend policies Over the last 10 years, a rm has had the earnings per share shown in the following table: 1. a. If the rm's dividend policy were based on a constant payout ratio of 40% for all years with positive earnings and 0% othenivise, what would be the annual dividend for 2016'? b. If the firm had a dividend payout of $1.00 per share, increasing by $0.10 per share whenever the dividend payout fell below 50% for two consecutive years, what annual dividend would the rm pay in 2016? c. If the rm's policy were to pay $0.50 per share each period except when earnings per share exceed $3.00, when an extra dividend equal to 80% of earnings beyond $3.00 would be paid, what annual dividend would the rm pay in 2016'? d. Discuss the pros and cons of each dividend policy described in parts a through c. a. If the rm's dividend policy were based on a constant payout ratio of 40% for all years with positive earnings and 0% othenivise, the annual dividend for 2016 is $ . {Round to the nearest cent.) b. If the firm had a dividend payout of $1.00 per share, increasing by $0.10 per share whenever the dividend payout fell below 50% for two consecutive years, the annual dividend the rm would pay in 2016 is $ . (Round to the nearest cent.) c. If the rm's policy were to pay $0.50 per share each period except when earnings per share exceed $3.00, when an extra dividend equal to 80% of earnings beyond $3.00 would be paid, the annual dividend the firm would pay in 2016 is $ . (Round to the nearest cent.) d. Which policy uses a constant-payout ratio which will yield low or no dividends if eamings decline or a loss occurs? {Select the best answer below.) 0 A. The policy described in part b. O B. The policy described in pan c. O C. The policy described in pan a. Which policy uses a low-regular-and-extra dividend policy giving investors a stable income? (Select the best answer below.) 0 A. The policy described in part a. O B. The policy described in part c. O c. The policy described in part b. 1: Data Table {Click on the icon located on the top-right comer of the data table below in order to copy its contents into a spreadsheet.) Year Earnings per share Year Earnings per share % 2019 $3.72 2014 $3.55 2018 $3.02 2013 $1.43 2017 $4.58 2012 $1.77 2016 $3.13 2011 -$1.09 2015 $3.38 2010 $0.25