Why Are Dividend Changes Rather Than Their Absolute Level Perceived

question 84

Multiple Choice

Why are dividend changes rather than their absolute level perceived to be more important to managers and shareholders?

• A)managers only change dividends under threatening conditions
• B)dividend changes are thought to signal future expectations
• C)MM states that the absolute level of dividends is irrelevant
• D)changes determine whether borrowing must occur

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Definitions:

Reasonable

A standard of fairness, appropriateness, or rationality often used in legal contexts to determine the justifiability of actions or decisions.

In Writing

A term indicating that a document or agreement has been formally recorded on paper or in a digital format rather than merely agreed upon orally.

Contract of Employment

A formal agreement between an employer and an employee outlining terms of employment, duties, and rights.

Fixed Period

A set duration of time with defined beginning and end points, often used in contracts, rentals, or employment agreements.