Choc-lattes Corp.earned $5.00 per share in 2006,and paid a dividend of $2.00 per share.If it earns $5.50 in 2007 and follows a constant nominal payout policy,its dividend will be

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A constant nominal payout policy means the company pays out the same dollar amount in dividends per share each year, regardless of its earnings per share. Since Choc-lattes Corp. paid a dividend of $2.00 per share in 2006, it will pay the same amount in 2007 under this policy.

Choc-Lattes Corp