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Signaling view of dividend policy

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5. Which of the following statements is (are) true regarding the signaling view (aka informational content) of dividend policy?

a. Stock market (prices) generally react positively to dividend increases (above expected)
b. Stock market (prices) generally react positively to dividend decreases (cuts)
c. Stock market (prices) generally react negatively to dividend increases (above expected)
d. Stock market (prices) generally react negatively to dividend decreases (cuts)
e. Both a & d
f. Both b & c
g. None of the above

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5. Which of the following statements is (are) true regarding the ...

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Response discusses the Signaling view of dividend policy

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