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    dividends

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    Please help with the following problem.

    3M pays quarterly cash dividends on its common stock. Suppose 3M forecasts earnings per share of $4.00 this year and $3.80, $3.20, $4.80,and $4.08 over the following four years, respectively, and believes it can maintain a long-term payout ratio of 1/4. 3M revises its dividends once per year, and the quarter dividend is one-fourth of the annual dividend. Which of the following annual dividend patterns would you recommend?

    1. $2.00, $1.05, $0.85, $1.45, $1.25

    2. $1.20, $1.00, $0.75, $0.95, $1.40

    3. $1.00, $0.95, $0.80, $1.20, $1.02

    4. $0.80. $0.80, $0.95, $1.00, $1.05

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    https://brainmass.com/business/accounting-for-corporations/problems-involving-calculations-with-dividends-421007

    Solution Preview

    Problem: 3M pays quarterly cash dividends on its common stock. Suppose 3M forecasts earnings per share of $4.00 this year and $3.80, $3.20, $4.80,and $4.08 over the following four years, respectively, and believes it can maintain a long-term payout ratio of 1/4. 3M revises its dividends ...

    Solution Summary

    This solution helps with various problems involving calculations with dividends. Calculations are given along with explanations.

    $2.19

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