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		$18 million			$ 7 million
2		16 million			12 million
3		11 million			6 million
4		22 million			7 million
5		20 million			8 million

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

a. If the marginal principle of retained earningsis applied, how much in total cash dividends will be paid over thefive years? (Enter your answer in millions.)

  

	Total cash dividends million

b. If the firm simply uses a payout ratio of 40percent of net income, how much in total cash dividends will bepaid? (Enter your answer in millions and round your answerto 1 decimal place.)
  

	Total cash dividends million

c. If the firm pays a 20 percent stock dividendin years 2 through 5, and also pays a cash dividend of $3.40 pershare for each of the five years, how much in total dividends willbe paid?
  

	Total cash dividends

d. Assume the payout ratio in each year is tobe 30 percent of net income and the firm will pay a 20 percentstock dividend in years 2 through 5. How much will dividends pershare for each year be? (Assume cash dividend is paid after thestock dividend). (Round your answers to 2 decimalplaces.)

	Year Dividends per Share 1 2 3 4 5