National Victor Company went public a month ago. Its owner, Shantiqua Follows, briefly learned about the signalling effects of dividends and of maintaining a consistent payout history. Accordingly, she is contemplating whether or not she should declare a dividend. If the dividend is declared, it is unlikely she will be able to abruptly cease dividends without share price ramifications. In light of this dilemma, she has approached you for advice on what course of action to take. Specifically, she wants clarification on the following - a) what would the dividend be signalling and b) what would be the other factors to consider, given that her company is young?

a)	a) that the board believes management will squander the cash flow, if retained and b) that the concern about the share price is based on dividend irrelevance theory
b)	a) that the firm has positive NPV projects; b) that the firm will generate sufficient positive cash flows to maintain the dividend
c)	a) that the firm believes the share price is undervalued; b) that the firm will generate sufficient positive net income to maintain the dividend
d)	a) that the firm does not need to raise equity; b) that the firm will generate sufficient positive cash flows to maintain the dividend