A firm has cash flow from operations of $80 million and needs $72 million for investment purposes, leaving $8 million of free cash flow. Assume the firm has 8 million shares outstanding and its shares are presently trading at $30 per share. If the firms were all equity financed and the firm followed a strict residual dividend policy, how much would it pay out in dividends per share?
o $1 per share
o $4 per share
o $3 per share
o $5 per share