Importance of the dividend policy on the market value, Corporate Finance

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The Directors of Rohan Plc are discussing the importance of the dividend policy on the market value of their firm. The Chairman considers that the dividend is important and does affect the company's market value. The Finance Director disagrees saying that the dividend policy has no impact on the company's market value.

Required:

Prepare a report that fully illustrates both Directors' views. Include relevant empirical research to support both views.


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