P12-6 Alternative dividend policies in the last 10 years, a company has had thanks to the earnings per share that are presented in the following table: Year Earnings per share 2006 $ 4.00 2005 3.80 2004 3.20 2003 2.80 2002 3.20 2001 2.40 2000 1.20 1999 1.80 1998 -0.50 1997 0.25 to. If the company's dividend policy was based on a constant pay ratio of 40 percent for all years with positive earnings and 0% for years that did not achieve these gains, what would the annual dividend be for each year? b. If the company had a dividend payment of $ 1 per share, increasing $ 0.10 per share whenever the dividend payment decreased to less than 50 percent for two consecutive years, what annual dividend would it pay each year?

Managerial Accounting
15th Edition
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Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
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P12-6
Alternative dividend policies in the last 10 years, a company has had thanks to the earnings per share that are presented in the following table:


Year Earnings per share
2006 $ 4.00
2005 3.80
2004 3.20
2003 2.80
2002 3.20
2001 2.40
2000 1.20
1999 1.80
1998 -0.50
1997 0.25

to. If the company's dividend policy was based on a constant pay ratio of 40 percent for all years with positive earnings and 0% for years that did not achieve these gains, what would the annual dividend be for each year?
b. If the company had a dividend payment of $ 1 per share, increasing $ 0.10 per share whenever the dividend payment decreased to less than 50 percent for two consecutive years, what annual dividend would it pay each year?

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