Pizza Inc. had earnings of $1.00, $1.25, and $4.00 per share and a dividend policy that resulted in annual dividends per share of $0.40, $0.50, and $1.60 for the past three years. The company anticipates maintaining the same dividend policy this year and also anticipates an increase in earnings to $6.00 per share this year. What dividend do you expect Pizza Inc. to pay in the next year?

Expected Dividend = $2.40

Explanation:

To find out the company dividend company policy, we have to compute the dividend payout ratio for each year:

                                       Year 1         Year 2       Year 3

Earnings                           $1.00          $1.25        $4.00

Dividends                         $0.40         $0.50       $1.60

Payout (Div/Earnings)        40%            40%         40%  

The company policy to pay dividend is 40% out of their total earnings as evident by the previous year dividends. The anticipates earnings for the upcoming year is $6.00, so we can calculate dividends by multiplying payout ratio of 40% to earnings:

Expected Dividend = 6 * 40%

Expected Dividend = $2.40

d,

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.