Over the last 10 years, a firm has had the earnings per share shown in the following table: Years and Earnings per share 2022 4.46 2017 2.72 2021 4.36 2016 1.49 2020 3.56 2015 1.32 2019 2.27 2014 -1.64 2018 3.88 2013 0.55 a. 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 2022? b. 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 2022? c. 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 2022?
Over the last 10 years, a firm has had the earnings per share shown in the following table: Years and Earnings per share 2022 4.46 2017 2.72 2021 4.36 2016 1.49 2020 3.56 2015 1.32 2019 2.27 2014 -1.64 2018 3.88 2013 0.55 a. 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 2022? b. 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 2022? c. 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 2022?
PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
6th Edition
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Chapter11: Investment Planning
Section: Chapter Questions
Problem 7FPE
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Over the last 10 years, a firm has had the earnings per share shown in the following table:
Years and Earnings per share
2022 4.46 2017 2.72
2021 4.36 2016 1.49
2020 3.56 2015 1.32
2019 2.27 2014 -1.64
2018 3.88 2013 0.55
2021 4.36 2016 1.49
2020 3.56 2015 1.32
2019 2.27 2014 -1.64
2018 3.88 2013 0.55
a. 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 2022?
b. 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 2022?
c. 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
2022?
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