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 $.80

2 $2.55 $3.30

3 $2.50 $ .35

4 $2.65 $2.80

5 $2.65 $6.60

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a. How much in total dividends per share will be paid under each plan over the five years?

b. Ms. Carter, the vice president of finance, suggests that stockholders often prefer a stable dividend policy to a highly variable one. She will assume that stockholders 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. Which plan will provide the higher present value for the future dividends? (Round to two places to the right of the decimal point.)