Reference no: EM132487184

Over the last 10 years, Clinton Company has had the earnings per share shown on the following table:

Year            Earnings Per Share

2019           $4.00

2018           3.80

2017          3.20

2016          2.80

2015          3.20

2014          2.40

2013         1.20

2012        1.80

2011       -0.50

2010        0.25

Question a. If Clinton Company'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 each year? Round your answer to two decimals.

Question b. If Clinton Company 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 company pay each year? Round your answer to two decimals.

Question c. If Clinton Company's policy were to pay $0.50 per share each year 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 company pay each year? Round your answer to two decimals.