A firm has had the indicated earnings per share over the last three years.                    YEAR EPS 2019 3.00 2018 2.00 2017 1.00 If the firm's dividend policy was based on a constant payout ratio of 50%, determine the annual dividend for each year. 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% of earnings per share above $1.00, determine the annual dividend for each year. B)Compare stock dividends and stock splits.

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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  • A firm has had the indicated earnings per share over the last three years. 

                 

YEAR EPS
2019 3.00
2018 2.00
2017 1.00
  • If the firm's dividend policy was based on a constant payout ratio of 50%, determine the annual dividend for each year.
  • 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% of earnings per share above $1.00, determine the annual dividend for each year.

B)Compare stock dividends and stock splits.

 

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