a$)$ Identity three types of dividend policy of a firm.

b$)$ Uswazi plc$.$ has the following equity accounts.

Common stock share ate Tsh $1$ Tsh $1,000,000$

Capital in excess of par. $q,$ Tsh$.2,000,000$

Returned earnings. $q,$ Tsh $500,000$

Total Tsh$.q,3,500,0001=$

The stock currently is trading at Tsh $5,$ a share. At the company annual meeting some stock holders insisted that the firm, should payout all of its retained earnings as dividends. The firms currently has Tsh $400,000/=$ in cash of which half is needed to meet the requirement of its borrowing agreements.

Required.

i$)$ What is the maximum amount of dividends that the company could pay without violating the capital impairment rule? Is paying this amount realistic?

ii$)$ What is the practical limit to the payment of dividend?