What is the purpose of a dividend policy?

In an attempt to raise additional capital to finance a major expansion, Axetem, Inc. is creating a steering committee to help devise an improved dividend policy to help attract more stock investors. You have been chosen as one of the participants in the steering committee.

During the committee’s initial meeting, you discussed how the “clientele effect” should receive a major consideration in devising an effective dividend policy for Axetem. You also discussed other factors that can also influence a company’s dividend policy.

Following your meeting, one of the members of the steering committee e-mails you with some follow-up questions. Write 1–2 pages that respond to the following in response to her e-mail:

What is the purpose of a dividend policy?
What 3 factors influence the direction of a dividend policy?
How does the implementation of or changes to a dividend policy usually affect stock prices?
What recommendations can you provide moving forward?
DELIVERABLE LENGTH: 1–2 pages (400-600 words)

ASSIGNMENT OBJECTIVES
Describe the characteristics of international financial markets.

Prepare an effective dividend policy for a multinational firm.

Axetem International, Inc. is a successful, Washington-based, public company and a manufacturer of various high-quality running and cross-training athletic shoes.

In addition to its national wholesale operation, Axetem, Inc. also maintains several satellite wholesale branch offices outside of the United States. These include office locations in Canada, France, the United Kingdom, and a currently nonoperational office in the Middle East.

Assume that you are a foreign business operations analyst for Axetem, Inc. Your job responsibilities include not only various business analyses but also the task of cross-training various employees in matters relating to Axetem’s foreign operations.

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