l perspective the company seems to be financially healthy and offers many prospects for growth and profitability in the future, especially if we consider its eagerness to prepare itself for the coming of competition to the industry. From a managerial perspective, the company seems also to be well managed, although the compensation plans work too much in the favor of managers.Thus, from an investment perspective the company seems to be a good investment, if we do not consider the effects that a dividend cut would have on the share price and the market value of the company.Therefore, we can see that the main problem comes from the possible effects of a dividend cut, and not from the financial health and risk of the business itself. In fact, a dividend cut would very much help the company at the moment in order to increase financial flexibility in the new era of deregulation, reduce leverage ratio in preparation for increased business risk and provide resources for future growth opportunities. So the dilemma we are faced with is whether it is possible for the company to adjust its dividend policy for valid business reasons and avoid a significant temporary or semi-permanent decline in its value.On the one hand, Kate could advise her clients to buy the share, on the basis that the price has already fallen, we do not know if it will fall further, and we do not even know that there will definitely be a dividend cut. Because we expect the company to do well in the future, investors can expect to make a capital gain, as the share price will go up.On the one hand, Kate could advise her clients to sell the share, or even short sell it, for a short time, on the basis that the price will fall further on the announcement of a dividend cut, and then buy again when the price is cheap enough, and the company becomes a growth rather than an income investment. However, this will be a very risky route to take.What we can see is that in both these cases th...
