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a. An investor owns 1000 shares in a company and the companys shares are trading at 100 per share. The company has announced that it
a. An investor owns 1000 shares in a company and the companys shares are trading at 100 per share. The company has announced that it intends paying a dividend of 3 per share. This investor would prefer the company to adopt a higher payout so as to receive a dividend of 5 per share. What action can the investor take to obtain the additional net cash inflow? Demonstrate that the investor will be just as well off if the company had paid a dividend of 5 per share.
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