Southern Cities Trucking Company has the following 5-year record of earnings per share. Year

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Southern Cities Trucking Company has the following 5-year record of earnings per share.

Year         EPS ($)

2009 ........1.40

2010 ........2.10

2011 ........ 1.0 0

2012 ........3.25

2013 ........0.80

Which of the following procedures would produce higher dividends to stockholders over this 5-year period?

a. Paying out dividends at a fixed ratio of 40% of EPS

b. Paying out dividends at a fixed rate of $1 per share

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Fundamentals of Investing

ISBN: 978-0133075359

12th edition

Authors: Scott B. Smart, Lawrence J. Gitman, Michael D. Joehnk

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