Solution needed ASAP

Big town Diners are forecasting earnings per share over the next 5 years as follows:

Year 1 2 3 4 5

EPS $2.00 $2.20 $1.90 $2.00 $2.50

The firm has $10,000,000 shares outstanding and is planning an expansion of their eateries. This

expansion will require $15 million per year for each of the next four years.

1. Determine the dividends per share and any external financing need if the firm maintains a

constant 20% payout ratio.

2. Determine the dividends per share and any external financing need if the firm maintains its

current $0.50 per share dividend.

3. Determine the dividends per share and any external financing need if the firm maintains a

passive approach to dividends.