The fact is that to maximize shareholder wealth in any business, there must be a consistent increase in profits with every common share of Coca Cola on the market . Therefore, an effective manager will focus more on ways to generate more profits within the company. For Coca Cola, the company makes money by maintaining a strong brand and producing a consumer product that is highly enjoyable and easily accessible to customers because of its high demand in the beverage industry. Therefore, to fully maximize its shareholder value, the company must maintain and extend its brand and products. In most cases, according to Brealey and Myers (2000), effective managers are conscious of setting long-term target payout ratios (based on their earnings), so managers often smooth dividend payments by moving part of the way toward their distribution target each year. They also revisit and study past profits to try to set future dates for paying dividends to shareholders. Investors are generally aware of this process and know that dividend increases often represent a sign of optimism from management.