Bavarian Brewhouse had earnings per share of $2.50 in 2004 and paid out a dividend per share of $1.45 that same year. Earnings per share are expected to be $3.25 in 2005.
-If Bavarian Brewhouse follows a constant nominal dividend policy what will be the dividend per share in 2005?

Question

Quizplus · Accepted Answer

A constant nominal dividend policy means the company pays out the same dividend amount per share each year, regardless of its earnings. Therefore, the dividend per share in 2005 will remain $1.45, as it was in 2004.

Bavarian Brewhouse Had Earnings Per Share of $2