Finance
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Which of the following statements is correct?
a. The effect of new information about a company on the firm's stock price depends more on how the new information compares to expectations than on the actual announcement itself.
b. If an increase in the cost of equity capital occurs when a company announces an increase in its dividend per share, this would be consistent with the bird-in-the-hand theory.
c. An increase in the stock price when a company decreases its dividend is consistent with the signaling theory.
d. A dividend policy that involves paying a consistent percentage of net income is the best policy if the clientele effect is correct
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Answer: D
Finance
Which of the following statements is correct?
a. The effect of new information about a company on the firm's stock price depends more on how the new information compares to expectations than on the actual announcement itself.
b. If an increase in the cost of equity capital occurs when a company announces an increase in its dividend per share, this would be consistent with the bird-in-the-hand ...
Purchase this Solution
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