The Information Content of a Dividend Increase Generally Signals That

question 353

Multiple Choice

The information content of a dividend increase generally signals that:

• A) The firm has a one-time surplus of cash.
• B) The firm has few, if any, net present value projects to pursue.
• C) Management believes that the future earnings of the firm will be strong.
• D) The firm has more cash than it needs due to sales declines.
• E) Future dividends will be lower.

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Definitions:

Business Relationships

The connections and interactions between companies and individuals in a professional context, often aimed at achieving mutual goals.