An Increase in Dividends Might Not Increase Price and May

question 84

Multiple Choice

An increase in dividends might not increase price and may actually decrease stock price if:

• A) the dividend increase cannot be sustained.
• B) the firm does not maintain an exact dividend payout ratio.
• C) the firm has too much retained earnings.
• D) markets are weak-form efficient.

---

Definitions:

Somatic Nervous System

The somatic nervous system is the part of the peripheral nervous system that coordinates body movements and transmits signals from the brain to the muscles.

Autonomic Nervous System

The part of the nervous system that controls involuntary actions of the body, such as heart rate, digestion, and respiratory rate.

Neural Agenesis

The absence or failure in the development of nerve cells (neurons).

Degeneration

The process by which tissues deteriorate over time, often due to disease, disorder, or aging.