You have just been asked by the Chief Executive Office of Papermark Ltd to provide...
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Finance
You have just been asked by the Chief Executive Office of Papermark Ltd to provide some advice as to their dividend policy. Specifically he would like you to answer the following questions. a) Provide a time line for the dividend payment process for a public company that includes five key events of this process. Briefly explain why the share price dropsafter the ex-dividend date. (5 Marks) b) Explain a situation where the announcement of an increase in dividends may bemet by a share price fall. (3 Marks) c) Explain how a share buy-back, although it places cash in the hands of itsshareholders, is different from a dividend payment. (2 Marks) d) Assume that a company has additional cash on hand right now, although management is not sure about the level of cash flows going forward. If the company would like to put cash in its shareholders' hands, what kind of dividend should it pay, and why? (2 Marks)
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