1. Comment on Joe Smolinski's suggestion of not paying any dividend. What are the pros and cons of such a policy?
2. Critically evaluate Jim Baker's argument that share olders are expecting a dividend
and if not paid one the share price will suffer.
Does he have a point? Please explain
3. What did Janet Long mean when she said, those shareholders who don't like our dividend policy can create homemade dividends? How can one make homemade dividends? Assume you are a shareholder who owns 1000 shares and are expecting the company to play at least $0.25 per share. If the company decides to retain all its earnings, how can you create homemade dividends?
4. What does the composition of shareholder groups within a corporation have to do with dividend policy? Based on the majiority shareholding groups and their relative proportions of ownership in the company, what sort of dividend policy should New Wave adopt?