According to the Text,dividends Are Value-Relevant Even Though the Firm's

question 49

Essay

According to the text,dividends are value-relevant even though the firm's dividend policy is irrelevant.How can that be true? What is the key assumption in the theory of dividend policy irrelevance?

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Definitions:

Algorithms

Step-by-step procedures or formulas for solving problems or completing tasks, often used in computer programming and mathematics.

Representativeness Heuristic

A cognitive shortcut where the likelihood of an object belonging to a category is judged based on how representative it is of that category.

Belief Perseverance

Belief perseverance is the psychological phenomenon where individuals maintain a belief despite new information or evidence that contradicts or disproves it.

Algorithms

A set of rules or a process followed in calculations or problem-solving, especially by a computer.