(Alternative dividend policies) Final earnings estimates for the Smithfield Meat Packing Company have been prepared for the CFO of the company and areshown in the following table: The firm has 7,400,000 shares of common stock outstanding. As assistant to the CFO, you are asked to determine theyearly dividend per share to be paid depending on the following possible policies:a. A stable dollar dividend targeted at 60 percent of earnings over a 5-year period.b. A small, regular dividend of $0.60 per share plus a year-end extra when the profits in any year exceed $20,000,000. The year-end extra dividend will equal70 percent of profits exceeding $20,000,000.c. A constant dividend payout ratio of 40 percent.a. What is the yearly dividend per share to be paid depending on a stable dollar dividend targeted at 60 percent of earnings for years 1 through 5?per share (Round to the nearest cent.)XData table(Click on the following icon in order to copy its contents into a spreadsheet.)PROFITS AFTER TAXES$18,000,00021,000,000YEAR12319,000,00023,000,00025,000,000

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Description: (Alternative dividend policies) Final earnings estimates for the Smithfield Meat Packing Company have been prepared for the CFO of the company and areshown in the following table: The firm has 7,400,000 shares of common stock outstanding. As assista

Part-a:YearProfit After Taxes1 18,000,0002 21,000,0003…

Answered: a. What is the yearly dividend per…

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a. What is the yearly dividend per share to be paid depending on a stable dollar dividend targeted at 60 percent of earnings for years 1 through 5?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 66P

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