Alternative dividend policiesOver 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		$3.06	2010		$3.04
2014		$4.54	2009		$1.96
2013		$3.04	2008		$1.68
2012		$3.62	2007		$0.81
2011		$3.51	2006		$0.42

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

2013?

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 2013?

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 2013?

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