Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

help would be much appreciated thank you :) Alternative dividend policies Over the last 10 years, a firm has had the earnings per share shown

help would be much appreciated thank you :) image text in transcribed
image text in transcribed
Alternative dividend policies Over the last 10 years, a firm has had the earnings per share shown in the following table 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 2019? 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 2019? c. If the firm's policy were to pay $0.50 per share each period except when camnings por 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 2019? d. Discuss the pros and cons of each dividend policy described in parts a through 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 2019 is (Round to the nearest cont.) b. If the firm had a dividend payout of $1.00 per share, increasing by S0. 10 per share whenever the dividend payout fell below 50% for two consecutive years, the annual dividend the firm would pay in 2019 is $(Round to the nearest cont.) 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, the annual dividend the firm would pay in 2019 is SU (Round to the nearest cent.) d. Which policy uses a constant-payout ratio which will yield low or no dividends it earnings decline or a loss occurs? (Select the best answer below.) A. The policy described in part a B. The policy described in part b. OC. The policy described in parte Which policy uses a low-regular-and-extra dividend policy giving investors a stable income? (Select the best answer below.) O A. The policy described in part a. OB. The policy described in part b. OC. The policy described in parte - payout of $1 ther per share, increasing by $0.10 per share whenever the dividend payout fell below 50% for tw 9, w Data table x qu ns a Ice anr pal (Click on the icon here in order to copy the contents of the data table below into a spreadsheet.) Year Earnings per share Year Earnings per share 2022 $4.00 2017 $2.40 2021 $3.80 2016 $1.20 2020 $3.20 2015 $1.80 2019 $2.80 2014 - $0.50 2018 $3.20 2013 $0.25 tw uld pa pou . ar ang Print Done in in in lar-and-extra dividend policy giving investors a stable income? (Select the best answer below.) In part a in part b

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Derivatives Markets

Authors: Robert McDonald

3rd Edition

978-9332536746, 9789332536746

More Books

Students also viewed these Finance questions

Question

Simplify the expression. -4 -2

Answered: 1 week ago