Alternative dividend policies Over the last 10 yean, a firm has had earnings per

Question

Alternative dividend policies Over the last 10 yean, a firm has had earnings per share shown in the following table 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 20077 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 20077 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 2007? If the firm's dividend policy were based on a constant payout ratio of 40% for all years with positive earnings and 0% otherwise, the annual dividend for 2007 is

Explanation / Answer

Dividend payout during 2007 will be $0

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