Discuss the pros and cons of having the directors formally announce wh

QUESTION

Discuss the pros and cons of having the directors formally announce what a firms dividend policy will be in the future.
By formally announcing firms dividend policy, directors
make public about the dividend, which sends positive news to the exchange
market and investors start investing in that stock. By increasing the demand of
the stock, share price increase and so does the profit for the company. On the other hand by formally¦

g the dividend policy makes directors to
abide by the guidelines and force them to declare the dividends. If directors
want to decrease the dividend amount, it makes a negative impact which affects
the share price.

ANSWER:

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