October 2003 QUESTION 4 Dividend Dividend 1992 0.10 1997 128 1993 0.00 1998 1.12 199 0.72 1999 128 1995 0.48 2000 1.52 1996 0.96 2001 1.60 Dividend Dividend 1992 $10 1997 $l.10 1993 1998 120 1994 1999 1.30 1995 1996 1.00 2001 1.50 Dividend Dividend 1997 1993 0.50 1998 0.50 1994 0.50 1999 0.66 1995 0.50 2000 1.14 1996 0.50 2001 1.30 d. With a constant-payout policy, if the firm's earnings drop or a loss occurs, the dividends will be low or non-existent. A regular dividend or a low-regular-and-extra dividend policy reduces owner uncertainty by paying relatively fixed and continuous dividendsOctober 2003 QUESTION 4 a. Year Dividend Year Dividend 1992 $0.10 1997 $1.28 1993 0.00 1998 1.12 1994 0.72 1999 1.28 1995 0.48 2000 1.52 1996 0.96 2001 1.60 b. Year Dividend Year Dividend 1992 $1.00 1997 $1.10 1993 1.00 1998 1.20 1994 1.00 1999 1.30 1995 1.00 2000 1.40 1996 1.00 2001 1.50 c. Year Dividend Year Dividend 1992 $0.50 1997 $0.66 1993 0.50 1998 0.50 1994 0.50 1999 0.66 1995 0.50 2000 1.14 1996 0.50 2001 1.30 d. With a constant-payout policy, if the firm’s earnings drop or a loss occurs, the dividends will be low or non-existent. A regular dividend or a low-regular-and-extra dividend policy reduces owner uncertainty by paying relatively fixed and continuous dividends