With a view to maximising shareholders wealth, the directors of Galahad plc are currently trying to decide on the most appropriate dividend policy to adopt for the company's shareholders. However, there is a strong disagreement between three of the directors concerning the benefits of cash dividends. Director A argues that cash dividends would be welcomed by the market and that a high payout ratio would reflect positively on the company's share price. Director B argues that whether a cash dividend is paid or not is irrelevant to shareholder wealth maximisation. Director C takes an opposite view to Director A and argues that dividend policy should be avoided as it would lead to a decrease in shareholder wealth. Required: a) Discuss the arguments for and against the position taken by each of the three directors. b) Assuming the board of directors decides to pay a dividend to shareholders, what factors should be considered when determining the dividend payment level?