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Your client, Heron Corporation, contacted you and would like your adviceon future shareholder distributions. Martin Morales (Heron's president) informs youthat Heron has a deficit in

Your client, Heron Corporation, contacted you and would like your adviceon future shareholder distributions. Martin Morales (Heron's president) informs youthat Heron has a deficit in accumulated E & P of $300,000, Starting this year, it expectsto generate annual E & P of $150,000 for the next four years and would like todistribute this amount to its shareholders, How should Heron Corporation distributethe $600,000 over the four-year period to provide the least amount of dividendincome to its shareholders (all individuals)? In a letter to Heron's president, makeappropriate suggestions on how this should be done. Also prepare a memo for yourfirm's file. Heron Corporation's address is 12 Nature Trail Way, Daytona Beach, FL32114.

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