A person is trying to decide if they should buy a lottery ticket. The ticket costs $2.00. If the ticket is a winner, the prize would be $1,000. Knowing that winning $1,000 is not a certain outcome (state of nature) , the person finds that the probability of winning is 0.001. Based on this information, the following payoff table can be constructed: 
What is the decision using a maximax or optimistic approach?
Definitions:
Floatation Costs
The total costs associated with a company issuing new stocks or bonds, including underwriting, legal, registration, and other expenses.
Dividend Irrelevance Theory
A theory proposed by Modigliani and Miller that suggests dividend policies do not affect a company’s capital structure or stock price in a perfect market.
Dividend Policy
A company's approach to distributing profits back to its shareholders, whether through cash dividends or share repurchases.
Dividend Irrelevance Theory
A theory suggesting that the dividend policy of a company is irrelevant to its value or the cost of capital and investment decisions.
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