Cromwall Laboratories has a target payout ratio of 60%. However the board realizes that adhering strictly to the payout ratio will cause the dividend payout to fluctuate. Therefore, the board has declared a regular dividend of $0.75 per share per year while paying extra cash dividends if funds are available. The earnings per share (EPS) for the period 2010 to 2015 are shown in the following table.

a. Calculate the payout ratio for each year on the basis of the regular dividend payment and the EPS given.
b. For each year, what is the difference between the regular $0.75 dividend and the 60% payout?
c. Cromwall Laboratories made a decision to pay an extra dividend of$0.50 in years where the difference between the regular $0.75 dividend and the 60% payout is at least $0.70. indicate the dividend payments and extra dividend payments, if any, for each year.
d. The company estimates future earnings per share will remain above $3.20 per share for most years. If the board wants to increase the regular dividend from $0.75 to $1.25, what factors should it consider before implementing the new regular dividend?

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Year EPS Year EPS 2012 $3.50 2015 $2.40 2014 2011 2.34 3.10 2013 1.95 2.80 2010