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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