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1) It is January 1, 2012. Farah Jennings has worked for some years at UMB Manufacturing Company. Yesterday, CEO informed Jennings that he would be retiring, efficient immediately, and Board of Directors has appointed Jennings new CEO. After a short celebration, she appears work today ready to recognize her responsibilities. Jennings is instantly confronted with the number of investment and corporate finance decisions. Jennings suggests to board of directors the increase in its dividend by knowing poor future prospect of her company. She describes to board which investors may then think that company has positive future prospects, leading to the increase in stock price and shareholder wealth. Briefly give explanation for whether such imitation is probable to achieve CEO’s objective over long term.

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