Can i get an answer for d and c please

The Earnings of Eustaquia, S.A. for the following years are estimated to be the

following:

Year Net income (in .)

+1 1,750,000

+2 2,500,000

+3 2,350,000

+4 1,125,000

+5 3,500,000

The company has 1M outstanding shares. Calculate the total amount of dividends and

the dividend per share paid according to the following policies.

1. The company has a target payout of 40%

+1) 1,750,000 * 0,4 = 700,000

+2) 2,500,000 *0,4 = 1,000,000

+3) 2,350,000 * 0,4 = 940,000

+4) 1,125,000 * 0.4 = 450,000

+5) 3,500,000 *0,4 = 1,400,000

Total dividend = 4,490,000

Amount of dividend per share= dividend payout/number of shares

+1) 700,000 / 1,000,000 = 0,7

2+) 1,000,000 / 1,000,000 = 1

3+) 940,000/1,000,000 = 0,94

4+) 450,000/1,000,000 = 0,45

5+) 1,400,000 / 10000 = 1,4

Total amount of dividends per year per share is = 4,49 euros

If the target payout in the firm is 40%, a shareholder I 5 years will receive 4,49 euros per share.

b) The company has 1M outstanding shares. Calculate the total amount of dividends and

the dividend per share paid according to the following policies.

There is a regular dividend of 0.7 per share plus an special dividend whenever

earnings are higher than 2 M. This special dividend will be equal to the 60% of

that excess.

1+) 1,000,000 * 0,7 = 700,000

2+) 1,000,000 * 0,7 + (500,000 *0,6) = 1,000,000

3+) 1,000,000* 0,7 (350,000 * 0,6) = 910, 000

4+) 1,000,000* 0,7 = 700,000

5+) 1,00,000 * 0,7 +( 1,500,000 / 0,6) = 1,600,000

Total 4,910,000

1+) 700,000=1,000,000 = 0,7 euros

2+) 1,000,000/1,000, 000= 1 euros

3+) 910,000/ 1,000,000= 0,91 euros

4+) 700,000/ 1,000,000= 0,7 euros

5+) 1,600,000/ 1,00,000= 1,6 euros

Total 4,91 euros per share

c) The company has decided to have its dividend policy as a residual of its

investments policy. Each year the company invests 2 M and its optimal capital

structure consists of a 30% debt ratio.

d) The company has a target payout of 50%. With the aim of smoothing the

change of its dividends (Lintner Model) it will modify its dividends following

changes in its earnings with an adjustment rate of the 30%. Lets suppose Div1

is already the optimal dividend.