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A recent graduate was hired to lead a small public company. In an effort to increase...

A recent graduate was hired to lead a small public company. In an effort to increase the stock price of the company he proposed increasing the dividends of the company. He explained “since the stock price is basically based off of present value of all future dividends, the stock price will go up if we increase dividends paid to shareholders.” Do you agree? Explain.

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Answer #1

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