Calculate boehm dividend per share for 2020

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Boehm Corporation has had stable earnings growth of 5% a year for the past 10 years, and in 2019 Boehm paid dividends of $9 million on net income of $15 million. However, net income is expected to grow by 32% in 2020, and Boehm plans to invest $11.0 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 5% earnings growth rate. Its target debt ratio is 30%. Boehm has 1 million shares of stock.

-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. Round your answer to the nearest cent.

-It continues the 2019 dividend payout ratio. Round your answer to the nearest cent.

-It uses a pure residual policy with all distributions in the form of dividends (30% of the $11.0 million investment is financed with debt). Round your answer to the nearest cent.

-It employs a regular-dividend-plus-extras policy, with the regular dividend being based on the long-run growth rate and the extra dividend being set according to the residual policy. What will the extra dividend be? Round your answer to the nearest cent.

Reference no: EM132699279

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