This exercise is designed to help you understand a companys payout policy decision such as paying dividends or having a stock split

A. Please answer the following questions

1. What are the three issues involved with distribution policy?

2. Describe the following terms:

1. Dividend irrelevance theory

2. the bird-in-the-hand theory

3. Tax effect theory

4. Signaling hypothesis

5. Clientele Effect

3. What are the implications of dividend stability?

4. What is a stock repurchase plan?

5. What are the pros and cons of dividends and repurchase?

6. Describe what are a) stock splits b) stock dividends and 3) the effects of them on stock prices.

B. Please find a company that pays dividends or had a stock split in the last five years and answer the following questions

7. Please provide a description of the company, such as the names, main businesses, and the names of the main officers (CEO or CFO)?

8. What and when is the most recent dividend (provide a description of the stock split)?

9. Why do you think the firm pays dividends or had a stock split?

10. Would you like to invest in a dividend-paying/stock split company? Why or why not? Please use the theories and hypotheses you learned in Part A to answer this question