Walmart has been one of the most successful retail companies in history with steady growth in earnings over the past eight years. The following information was extracted from the company€™s annual reports. The market price is an average of the highest and lowest price for the year. Dividends and net income are in millions of U. S. dollars:

Assume that you are a financial analyst preparing a forecast of Walmart€™s operating results for fiscal year 2014. Because of a number of factors, you believe that net earnings for 2014 will be in the range of $ 17,000 million to $ 17,500 million. To complete your financial forecast, you now need to estimate the total amount of dividends that Walmart will pay.
Required:
1. Based on the information above, describe the dividend policy of Walmart, and estimate the dividends that the company will pay in 2014.
2. Walmart€™s board of directors has increased dividends per share continuously over the past eight years. What is your expectation of dividends per share for fiscal year 2014? Justify your answer.
3. The dividend yield has also increased steadily over the past eight years. What should be the market price per share for the dividend yield to reach 2.50 percent, assuming a dividend of $ 1.84 per share? Explain.

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2005 $4,437 5,048 4,217 3,746 3,586 2,802 2,511 2,214 10,267 0.52 56.19 2012 2011 2010 2009 2008 2007 2006 Dividends Net income (net earnings) Dividends per common share Market price per share Dividend yield 16,999 1.59 69.95 15,959 1.46 56.49 14,335 1.21 53.40 13,346 0.95 46.92 12,075 1,28411,231 0.60 48.00 0.88 48.73 0.67 47.23 2.27% 2.58% 2.27% 2.02% 1.81% 1.42% 1.25% 0.93%