D€™Ambrosio Ltd. has been operating for 10 years. The company€™s net income and other information since inception are shown below.

Required:
a. Which year would have been the first year D€™Ambrosio could have legally paid out dividends?
b. Would you recommend that the company pay out dividends at that time? Explain briefly.
c. In 2015, the board of directors was starting to believe the company was becoming more stable. Directors began discussing the options for rewarding the shareholders for the company€™s success but they were hesitant to commit the company to any long-term payments. What options would you suggest to the board?
d. In 2016, the board felt more comfortable that the company was on the road to long-term success. What dividend policy could the company consider now? If the company wanted to preserve its cash, what other option could it consider?

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Year Net income (loss) ()Retained earnings (S) Cash ($) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 (150,000) (25,000) 35,000 (5,000) 50,000 125,000 140,000 160,000 170,000 200,000 (150,000) (175,000) (140,000) (145,000) (95,000) 30,000 170,000 330,000 500,000 700,000 2,500 3,000 2,000 2,800 12,000 12.500 15,000 14,200 22,000