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1. If dividend clienteles exist, what does that imply for firms that adopt a new dividend policy in order to increase firm value? 2. How

1. If dividend clienteles exist, what does that imply for firms that adopt a new dividend policy in order to increase firm value?

2. How does an auction-based repurchase differ from an open-market repurchase? When is one method typically used over the other?

3. A corporation decides to cut its dividend from 2 per share to 1.50 per share. Give two rationales/theories to explain why this action may cause the stock price to decrease.

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