Boehm Corporation has had stable earnings growth of 9% a year for the past 10 years, and in 2021 Boehm paid dividends of $3 million on net income of $5 million. However, net income is expected to grow by 30% in 2022, and Boehm plans to invest $3.0 million in a plant expansion. This one-time unusual earnings growth won't be maintained, though, and after 2022 Boehm will return to its previous 9% earnings growth rate. Its target debt ratio is 33%. Boehm has 1 million shares of stock.

Calculate Boehm's dividend per share for 2022 under each of the following policies:

Its 2022 dividend payment is set to force dividends to grow at the long-run growth rate in earnings. Round your answer to the nearest cent.

$

It continues the 2021 dividend payout ratio. Round your answer to the nearest cent.

$

It uses a pure residual policy with all distributions in the form of dividends (33% of the $3.0 million investment is financed with debt). Round your answer to the nearest cent.

$

It employs a regular-dividend-plus-extras policy, with the regular dividend being based on the long-run growth rate and the extra dividend being set according to the residual policy. What will the extra dividend be? Round your answer to the nearest cent.

$

B. Which of the preceding policies would you recommend?

1 2 3 or 4