1. Can linear technology increase its dividend? If so: Can it maintain the new dividend level in the future? *For a better analysis of this point look at exhibit 3, date of dividend change announcement (Dividend b) and the LLTC return (This tells you whether the stock went up or down after the dividend announcement). if the stock went up or down after the dividend announcement). 3. Analyze the management dilemma in light of the agent's theory. (What happens if no funds are distributed?) Analyze the management dilemma in light of Modigliani and Miller (Distribute vs. not distribute funds, pay out in the form of dividends vs. pay out through buybacks). buybacks) 5. Analyze the management dilemma considering the clientele effect (Pay out in the form of dividends vs. pay out in the form of buybacks). 6. Analyze management's dilemma considering the tax effect on shareholders. (Pay out in the form of dividends vs. in the form of repurchases). 7. What decision would you make, why? 8. What decision do you think Linear Technology made?