Conclusion
Corporate debtanddividend policies emerge after weighing difficult trade-offs among competing desirable ends. No algorithm or model straightforwardly dictates policies. As analysts and managers, we confront the need to run the decision process well by ensuring that all trade-offs surface and that all arguments are heard. Ultimately, good policies meet these three tests:
1. Do they create value?
2. Do they create a competitive advantage?
3. Do they sustain the company’s managerial vision?