Financial Markets React When a Firm Pays or Chooses Not

question 108

Multiple Choice

Financial markets react when a firm pays or chooses not to pay a dividend. A dividend announcement is a way for management to send a message to shareholders.   This is known as the __________________. ​

• A)Clientele Effect​
• B)Residual Dividend Theory​
• C)Signaling Effect​
• D)Expectations Theory​

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Definitions:

Concurrently

Occurring or existing at the same time.

Systematic Desensitization

A behavior therapy technique aimed at reducing phobic or anxiety responses through gradual exposure to the feared object or situation paired with relaxation exercises.

Relaxation Response

A physical state of deep rest that is the opposite of the stress response, which can be induced through practices like meditation, deep breathing, or yoga.

Feared Stimulus

An object, situation, or event that triggers a strong fear response in an individual, often leading to avoidant behavior.