1. Discuss fully Modigliani and Millers irrelevance theory of dividends (1961) and compare and contrast it with the following:

1. clientele effects
2. residual dividends
3. signalling theory

Pear plc has reported the following over the last eight-year period;

	Earnings	Dividends
	Cents per share	Cents per share
2012	57.7	33.8
2013	65.4	35.5
2014	77.5	38.7
2015	86.5	42.0
2016	84.2	45.0
2017	70.1	48.0
2018	66.7	51.0
2019	70.3	52.0

Required:

2. Analyse whether the points discussed in part a) are consistent with the observation of a slow steady growth in dividends? Use the dividends of Pear plc to illustrate your analysis.