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.

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Definitions:

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Federal Drug Administration

A United States federal agency responsible for protecting and promoting public health through the control and supervision of food safety, tobacco products, dietary supplements, prescription and over-the-counter pharmaceutical drugs, vaccines, and other medical products.

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