(a) You are the Chief Executive of a large publicly listed company, and you are considering a large investment New Zealand. You are not sure that the investment is positive NVP, but at the same time, the new investment will make the company much larger, and this will increase your salary package and prestige.

(ii) How can the company reduce such problems? (4 marks)

(b) Your firm has just announced an increase in dividend per share (compared to last year) and when this was announced, the share price of the company increased by 5%. Briefly discuss two possible explanations for the share price increase. (3 marks)