The Hastings Sugar Corporation has the following pattern of netincome each year, and associated capital expenditure projects. Thefirm can earn a higher return on the projects than the stockholderscould earn if the funds were paid out in the form of dividends.Year Net Income Profitable Capital Expenditure

1 $ 16 million $ 8 million

2 24 million 12 million

3 16 million 7 million

4 21 million 7 million

5 23 million 9 million

The Hastings Corporation has 2 million shares outstanding. (Thefollowing questions are separate from each other).

a. Ifthe marginal principle of retained earnings is applied, how much intotal cash dividends will be paid over the five years?(Enter your answer in millions.)

b. Ifthe firm simply uses a payout ratio of 30 percent of net income,how much in total cash dividends will be paid? (Enter youranswer in millions and round your answer to 1 decimalplace.)

c. Ifthe firm pays a 10 percent stock dividend in years 2 through 5, andalso pays a cash dividend of $3.40 per share for each of the fiveyears, how much in total dividends will be paid?

d.Assume the payout ratio in each year is to be 30 percent of the netincome and the firm will pay a 20 percent stock dividend in years 2through 5, how much will dividends per share for each year be?(Assume the cash dividend is paid after the stock dividend.)(Round your answers to 2 decimal places.)