You have just read a press release in which a firm claims that it will be able

Question:

You have just read a press release in which a firm claims that it will be able to generate a higher level of cash flows for its investors going forward. Justify the choice of a payout that could credibly convey that information to the market.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...