The Information Content of a Dividend Increase Generally Signals That

question 59

Multiple Choice

The information content of a dividend increase generally signals that:

• A) the payer has a one-time surplus of cash.
• B) the payer has few, if any, net present value projects to pursue.
• C) management believes earnings growth will be strong going forward.
• D) the payer has more cash than it needs due to a decline in future orders.
• E) dividends thereafter will be lower.

---

Definitions:

Weak Superegos

Refers to individuals with underdeveloped or ineffective superegos, resulting in difficulties in regulating impulses and adhering to societal norms and morals.

Karen Horney

A German psychoanalyst known for her theories on neurosis, personality development, and the concept of "basic anxiety."

Neo-Freudian

Pertaining to theorists who were influenced by and extended Freud's work, typically placing more emphasis on social and cultural factors than on innate biological drives.

Denial

A psychological defense mechanism in which confrontation with a personal problem or with reality is avoided by denying the existence of the problem or reality.