The following table reports (in millions) earnings, dividends, capital expenditures, and R&D for Intel for the period 1990–95:

Year Net Income Dividends Capital Expenditures R&D 1990 $650 $0 $680 $517 1991 819 0 948 618 1992 1,067 43 1,228 780 1993 2,295 88 1,933 970 1994 2,288 100 2,441 1,111 1995 3,566 133 3,550 1,296.

What are the dividend payout rates for Intel during these years? Is this payout policy consistent with the factors expected to drive dividend policy, as discussed in the chapter? What factors do you expect would lead Intel’s management to increase its dividend payout? How do you expect the stock market to react to such a decision?AppendixLO1