Problem:
Delta Corporation earned $2.50 per share during fiscal year 2011 and paid cash dividends of $1.00 per share. During the fiscal year that just ended on December 31, 2012, Delta earned $3.00 per share, and the firms managers expect to earn this amount per share during fiscal years 2013 and 2014 as well.
Required:
Question 1: What was Deltas payout ratio for fiscal year 2011?
Question 2: If Deltas managers wish to follow a constant dollar payout dividend policy, what dividend per share will they declare for fiscal year 2012?
Question 3: If Deltas managers wish to follow a constant payout ratio dividend policy, what dividend per share will they declare for fiscal year 2012?
Question 4: If Deltas managers wish to follow a partial-adjustment strategy, with a target payout ratio equal to FY 2011's, how could they change dividend payments during 2012, 2013 and 2014?
Note: Please show guided help with steps and answer.