If a Dividend Increases, but Leads to a Stock Price

question 100

Multiple Choice

If a dividend increases, but leads to a stock price decrease, what theory would best explain such a reaction by the market?

• A)Expectations Theory
• B)Signaling Theory
• C)Dividend Preference Theory
• D)Residual Dividend Theory

---

Definitions:

Business Plans

Detailed documents outlining the objectives, strategies, financial forecasts, and market analysis of a business.

Business Plan

A formal document that outlines a company's goals, strategies, target market, and financial forecasts.

Overall Appearance

The collective physical presentation or look of a person, item, or place, based on all observable characteristics.

Marketing Objectives

Defined as specific goals set by a business when promoting its products or services to potential consumers that should be achieved within a given timeframe.