An Increase in Share Price Following an Increase in Dividends

question 62

Multiple Choice

An increase in share price following an increase in dividends is logical if the:

• A)firm borrows to obtain cash for the dividend.
• B)increased dividend signals higher future earnings.
• C)financial markets are efficient.
• D)clientele effect is not important.

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Definitions:

Net New Jobs

The total number of jobs created in an economy, subtracting the number of jobs lost from the number of jobs gained over a specific period.

Technical Knowledge

Refers to the specific skills, understanding, and expertise required for tasks related to technology, engineering, or other specialized fields.

Product Innovation

The development and introduction of new or significantly improved goods or services.

Entrepreneur

An individual who starts and manages a business venture, taking on financial risks in the hope of profit.