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 based on a constant payout ratio of 50 percent for all of the years with earnings over $1.50 per share and a zero payout otherwise, the annual dividends for 1999 and 2003 were

A) $0.50 and $1.25, respectively.
B) $0 and $2.00, respectively.
C) $0 and $1.25, respectively.
D) $0 and $0.88, respectively.