Alternative dividend policies: Over the last 10 years, a firm has had the earnings per share shown in the following table:

Year		Earnings per share	Year		Earnings per share
2015		$4.73	2010		$2.61
2014		$3.43	2009		$1.05
2013		$3.82	2008		$1.42
2012		$3.23	2007		$1.63
2011		$3.71	2006		$0.83

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a.If the firm's dividend policy were based on a constant payout ratio of 40% for all years with positive earnings and 0% otherwise, what would be the annual dividend for 2009?

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 firm pay in 2009?

c.If the firm'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 firm pay in 2009?

d.Discuss the pros and cons of each dividend policy described in parts a through c.