Dividend Payout. Most Corporation had a net income of $800000 in 20X1. Earning

Dividend Payout. Most Corporation had a net income of $800000 in 20X1. Earnings have grown at an 8 percent annual rate. Dividends in 20X1 were $300000.
In 20X2 the net income was $1100000. This of course was much higher than the typical 8 percent annual growth rate. It is anticipated that earnings
will go back to the 8 percent rate in future years. The investment in 20X2 was $700000.

How much dividend should be paid in 20X2 assuming: (a) a stable dividend payout ratio of 25 percent? (b) a stable dollar dividend policy is maintained? (c)
a residual-dividend policy is maintained and 40 percent of the 20X2 investment is financed with debt? (d ) the investment for 20X2 is to be financed with
80 percent debt and 20 percent retained earnings? Any net income not invested is paid out in dividends.