The Information Content of a Regular Dividend Increase Generally Signals

question 77

Multiple Choice

The information content of a regular dividend increase generally signals that

• A)management believes the future earnings of the firm will be strong.
• B)the firm has recently sold a subsidiary.
• C)the firm has a one-time surplus of cash.
• D)the firm has more cash than it needs due to declining sales.
• E)future dividends will be lower.

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Definitions:

Property Rights

Property rights are legal rights to use, control, and benefit from a particular property or resource, which can include both tangible and intangible assets.

Extraction Rate

pertains to the speed or efficiency with which a resource (like oil or minerals) is removed from its natural setting or source.

User Cost

The cost associated with using a good or service, including the opportunity cost of forgone alternatives and any depreciation.

Mining Company

A business entity engaged in the extraction of minerals, precious metals, or other geological materials from the Earth.