Determine the annual dividend for each year

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Question: A firm has had the indicated earnings per share over the last three years:

Year            EPS

2016          $3.00

2015            2.00

2014            1.00

(a) If the firm's dividend policy was based on a constant payout ratio of 50 percent, determine the annual dividend for each year.

(b) If the firm's dividend policy was based on a fixed dollar payout policy of 50 cents per share plus an extra dividend equal to 75 percent of earnings per share above $1.00, determine the annual dividend for each year.

Reference no: EM131975443

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