Lithion, Co

question 79

Multiple Choice

Lithion, Co. has a policy of returning a minimum of 25 percent of earnings to shareholders every year through dividend issues and open-market stock repurchases. In each quarter this year, the company earned $0.20 per share. In each of the first three quarters, the company paid a regular cash dividend of $0.05 per share. What combination of dividends could the company's board approve to meet their target payout percentage?

• A) A regular cash dividend of $0.05
• B) A regular cash dividend of $0.05 per share and an extra dividend of 0.05 per share
• C) A regular cash dividend of $0.05 per share and an extra dividend of $0.10 per share
• D) A regular cash dividend of $0.05 per share and an extra dividend of $0.20 per share

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