In doing a five-year analysis of future dividends, Newell Labs Inc. is considering the following two plans. The values represent dividends per share.

Year	Plan A	Plan B
1	$2.50	$0.80
2	2.55	3.30
3	2.50	0.35
4	2.65	2.80
5	2.65	6.60

a. How much, in total dividends per share, will be paid under each plan over the five years? (Round the final answers to 2 decimal places.)

	Plan A	Plan B
Total dividends	$	$

b-1. Ms. Carter, the vice-president of finance, suggests that shareholders often prefer a stable dividend policy to a highly variable one. She will assume shareholders apply a lower discount rate to dividends that are stable. The discount rate to be used for Plan A is 10 percent; the discount rate for Plan B is 12 percent. Calculate the present value for the future dividends. (Do not round intermediate calculations. Round the final answers to 2 decimal places.)

	Plan A	Plan B
PV of Future dividends	$	$

b-2. Which plan will provide the higher present value for the future dividends?

multiple choice

Plan A

Plan B