Explain the justification for low dividend policy

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Reference no: EM133904826

Questions:

1. Explain the justification for low dividend policy and when should firms adopt a high-dividend payout policy.

2. Discuss in what way may managers use dividends to convey pertinent information about their firms in a world of asymmetry? Why should a manager choose to convey information via dividend policy? Does empirical evidence support or refute the informational role of dividends?

3. Explain the possible stock market reaction following the announcement that a firm will increase its dividend payment. Why?

Reference no: EM133904826

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