问题详情

In2007,MCorporationpaiddividendstotaling＄3milliononnetincomeof＄15million.2007wasanormalyear,andforthepastfiveyears,earningshavegrownataconstantrateof10percent.However,earningsareexpectedtojumpto＄18millionin2008,andthefirmexpectstohave＄12millioninvestmentopportunitiesin2009.ItispredictedthatMwillnotbeabletomaintainthe2008levelofearningsgrowthinthefuture----thehigh2008earningslevelisattributabletoanexceptionallyprofitablenewproductlineintroducedinthatyear----andthecompanywillreturntoitsprevious10percentgrowthrate.M’stargetdebtratiois40percentin2007,whichwillbecontinuedinthefuture.CalculateM’sexpecteddividendsfor2008ifitfollowseachofthefollowingpolicies:A.Its2008dividendpaymentissettomakedividendsgrowatthelong-rungrowthrateinearnings.B.Itcontinuesthe2007dividendpayoutratio.C.Itusesaresidualpolicywithalldistributionsintheform.ofdividends.D.Itemploysaregular-dividend-plus-extraspolicy,withtheregulardividendbeingbasedonthelong-rungrowthrateandtheextradividendbeingsetaccordingtotheresidualpolicy(Indicatetheregulardividendandtheextradividendseparately).