Philips Rock and Mud is trying to determine the maximum amount of cash dividends it can pay this year. Assume its balance sheet is as follows:

Assets Cash $388,000 Accounts receivable 831,000 Capital assets 1,019,000 Total assets $2,238,000 Liabilities and Shareholders' Equity Accounts payable $448,000 Long-term notes payable 280,000 Common stock (320,000 shares) 640,000 Retained earnings 870,000 Total liabilities and shareholders' equity $2,238,000

a-1. From a legal perspective, what is the maximum amount of dividends per share the firm could pay? (Round the final answer to 2 decimal places.)

Dividends per share $

a-2. Is this realistic?

multiple choice

Yes

No

b. In terms of cash availability, what is the maximum amount of dividends per share the firm could pay? (Round the final answer to 2 decimal places.)

Dividends per share $

c. Assume the firm earned a 20 percent return on shareholders equity. If the board wishes to pay out 40 percent of earnings in the form of dividends, how much will dividends per share be? (Round the final answer to 2 decimal places.)

Dividends per share $