The Theory That Dividend Policy Can Create Value Because Decisions

question 25

Multiple Choice

The theory that dividend policy can create value because decisions regarding the size of the dividend may convey information about the future prospects of the firm is known as what?

• A)Signalling theory
• B)The irrelevance proposition
• C)Clientele effect
• D)None of the above

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Definitions:

Aggregate Economy

The total economic output of a country, measured through indicators such as GDP, which encompasses all sectors and economic activities.

Strike Activity

Actions taken by workers, often organized by unions, where they stop working to protest against their employers for better pay, benefits, or working conditions.

National Legislation

Laws or statutes enacted by a country's legislative body that govern nationwide policies, issues, or concerns.

Collective Bargaining Agreements

legally binding contracts negotiated between unions and employers that outline terms of employment, working conditions, and employee benefits.