I’m working on a Business question and need guidance to help me study.QUESTION 1The catering theory of dividends suggests that managers pay dividends because of investor demand. Using knowledge gained from this chapter, conduct a search in the Strayer Library for an article on this theory.Indicate the article you found and briefly provide an opinion on this theory.
Be sure to respond to at least one of your classmates’ posts.
The article found is attached!!!Below is the classmate post to respond to:”Hello Everyone,The theory suggests that management of companies pay dividend only when investors demand the same. When the demand for dividends is high, the investors put a stock premium on the payers in the market. Management responds to this demand by paying dividend. However, when investors are indifferent, they skip the dividend payments. The article presents and empirical way of deciding whether dividends should be paid or not.The article that I researched on the catering theory is from FinWorld. The related link is http://finworld.wikidot.com/a-catering-theory-of-dividends.”Requirements: 100 word opinion on the article and 100 words on the classmate responseQuestion 2 Answer the following question and submit your answer.In 350 words, explain why diversification is a wise strategy for investors.
Given the benefits of diversification, why shouldn’t managers acquire firms in different industries to diversify a company?
Requirements: Question 1 total 200 words and question 2 total 350 words   |   .doc file