An Example of the Existence of an Information Content Effect

question 341

True/False

An example of the existence of an information content effect of dividends is when GM's share price falls on the same day the firm announces a stock dividend.

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Definitions:

Stepwise Regression

A method of fitting regression models in which the choice of predictive variables is carried out by an automated procedure, either by adding or removing variables step by step, based on certain criteria.

Independent Variables

Factors in a study that are controlled or altered by researchers to examine their effect on dependent outcomes.

Stepwise Regression

A method of regression analysis in which the choice of predictive variables is carried out by an automatic procedure, either by adding or removing variables step by step.

Multiple Regression

A statistical technique used to model the relationship between two or more independent variables and a dependent variable by fitting a linear equation to observed data.