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 is based on a $0.50 payout per share, increasing by $0.05 per share whenever earnings exceed $1.50 per share, the annual dividends for 2000 and 2003 were

A) $1.25 and $2.50, respectively.
B) $0.50 and $0.50, respectively.
C) $0 and $0.50, respectively.
D) $0.50 and $0.55, respectively.