Calculate boehm dividend per share

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Boehm Corporation has had stable earnings growth of 8% a year for the past 10 years, and in 2019 Boehm paid dividends of $5 million on net income of $10 million. However, net income is expected to grow by 22% in 2020, and Boehm plans to invest $7.5 million in a plant expansion. This one-time unusual earnings growth won't be maintained, though, and after 2020 Boehm will return to its previous 8% earnings growth rate. Its target debt ratio is 31%. Boehm has 1 million shares of stock.

Problem 1:
Calculate Boehm's dividend per share for 2020 under each of the following policies:Its 2020 dividend payment is set to force dividends per share to grow at the long-run growth rate in earnings.

Reference no: EM132936239

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