As the financial manager of firm Mini, you are analyzing the dividend policy of the firm. You
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Question:
As the financial manager of firm Mini, you are analyzing the dividend policy of the firm. You find that firm Mini can either pay out dividends of $2 per share every year for each of the next two years or can pay $1 per share in one year, reinvest the other $1 per share into the firm and then pay $3.1 per share in two years. Investors require a 10% return. Show your work when comparing the two dividend policy options and discuss the conclusion you got. Assuming that the second dividend is a liquidating dividend and the firm has 100,000 shares outstanding.
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