A Firm Has Had the Following Earnings History Over the Last

Multiple Choice

A firm has had the following earnings history over the last five years: If the firm's dividend policy was to pay $0.25 per share each period except when earnings exceed $1.50, an extra dividend equal to 50 percent of the earnings above $1.50 would be paid, the annual dividends for 2012 and 2015 were ________.

A) $0.25 and $1.25, respectively
B) $0.25 and $0.75, respectively
C) $0 and $0.25, respectively
D) $0.25 and $0.25, respectively