Explain the positive npv projects

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You are the CFO of a company that has been following the popular "somewhat constant dividend payout" policy. Recently, you are considering a change in the dividend policy with an eye to enhance shareholders value. Specifically, you would like to change the policy to first consider allocating the company's available cashflows to fund all positive NPV projects and then pay out any leftover cash, if any, as dividends to shareholders. Discuss throughly the pros and cons of such a change according to the theories we have discussed in class and in the textbook. At the end of the day, would you change the policy? Why?

Reference no: EM133114107

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