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

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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.

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, the annual dividend for

2009 is $ nothing .

(Round to the nearest cent.)

Year

Earnings per share

Year

Earnings per share

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2015

$4.95

2010

$3.47

2014

$4.77

2009

$1.02

2013

$4.99

2008

$1.35

2012

$3.01

2007

$0.55

2011

$4.33

2006

$0.66