AFM: EXERCISES ON DIVIDEND PAYOUT POLICY 1. Tekadi Cement Industry inc., had total earnings of RM9 million last year but expects total earnings at the end of this to drop to RM4,700,000 due to the pandemic that effect the economy as whole. There are currently 1 million shares of common stock outstanding. The company has RM4 million of investments to undertake this year. The company finances 40 percent of its investments with debt and 60 percent with equity capital. Last year's dividend was RM3 per share. a) If the company follows a pure residual dividend policy, how large a dividend per share will the shareholders receive this year? b) If the company maintain a constant dividend payout ratio each year, how large a dividend per share will the shareholders receive this year? c) If the company follows a constant dollar dividend policy, how large a dividend per share will the shareholders receive this year