Question
you are the CFO of a company that has been following the popular somewhat constant dividend payout policy. Recently, you are considering a change in
you are the CFO of a company that has been following the popular "somewhat constant dividend payout" policy. Recently, you are considering a change in the dividend policy with an eye to enhance share holders value. Specifically, you would like to change the policy to first consider allocating the company's available cdashflows to fund all positive NPV projects and then pay our any leftover cash, if any, as dividends to sharesholders. Discuss thoroughly the pros and cons of such a change according to the theories we have discussed in class. Would you change the policy? Why?
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