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

2015?

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

2015?

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

2015?

d.Discuss the pros and cons of each dividend policy described in parts a through

YEAR EPS YEAR EPS

2019 $1.50 2014 $3.89

2018 $4.71 2013 $1.83

2017 $4.67 2012 $1.83

2016 $3.71 2011 -$0.57

2015 $3.45 2010 $0.75