Question $2$

a$)$ Identify and discuss one advantage and one disadvantage of maintaining a constant dividend policy over many years.

$(4$ marks$)$

b$)$ Discuss the factors that should be considered in setting a firm's dividend policy.

$(6$ marks$)$

c$)$ Explain how a stock dividend would be recorded by the issuing firm, and state, with supporting arguments whether stockholders would view a stock dividend as favorably as a cash dividend.

$(5$ marks$)$