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The cash dividend is paid from the net profit of the company for the financial year. It is not necessary for a firm to declare dividends; alternatively, the funds can be used for the company's other development efforts.

The market price of the shares has not been given full recognition to the increase in return on assets, the profit margin on sales, and earnings per share.This indicates that market forces are having a negative impact on the stock market price.

It is possible that the relatively low market value of the shares is due to the fact that dividends have not been paid in the past.It may be stated that the company's operational condition is improving and that it seems to be able to pay a dividend.

However, it would be prudent to examine as far as possible the additional internal and external aspects listed in part (a) of the matter.

For 2018, a dividend in the range of 12 to 36 cents per share, or 10% to 30% of profits per share, seems reasonable. $240,000 ($0.12 X 2,000,000) to $720,000 ($0.36 X 2,000,000) will be required in cash. Payments in excess of $720,000 have a significant negative impact on working capital. At the average 2018 market price, this would result in between 1.3 and 4%.