Question: Explain the steps a manager may follow in setting Dividend Policy. Generally, the distribution decision is made jointly with capital structure and capita budgeting decisions.

Explain the steps a manager may follow in setting Dividend Policy. Generally, the distribution decision is made jointly with capital structure and capita budgeting decisions. The underlying reason for joining these decisions is asymmetric information

managers know more than investors know about their company

s prospects. Explain how asymmetric information influences managerial actions

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