How will dividend payments affect the future growth of the


Problem

As the company Treasurer, the Board of Directors has asked you to comment upon a proposal to initiate dividend payments to the company's common shareholders. The Board wants you to address:

· What signals does the initiation and continuance of the dividend payments make to the market?

· How will dividend payments affect the future growth of the company?

· Would a stock repurchase (the company buys back its own shares) be a preferable alternative to cash dividend payments?

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Corporate Finance: How will dividend payments affect the future growth of the
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