An Example of the Existence of an Information Content Effect

question 310

True/False

An example of the existence of an information content effect of dividends is when IBM's share price rises upon the announcement of unexpectedly high earning.

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Definitions:

Force Majeure Clause

A provision in a contract that relieves parties from fulfilling their obligations due to unforeseen events beyond their control, such as natural disasters, war, or acts of government.

Terminate

To bring to an end; cease or conclude a condition, agreement, or process.

Frustrated Contract

A contract that, through no fault of either party, is unable to be fulfilled due to an unforeseen event, leading to its termination.

Implied Term

A provision not explicitly stated but understood to be included in a contract or agreement by virtue of the law or the nature of the agreement.