The Information Content of a Dividend Increase Generally Signals That

question 69

Multiple Choice

The information content of a dividend increase generally signals that:

• A)the firm has a one-time surplus of cash.
• B)the firm has few, if any, net present value projects to pursue.
• C)management believes earnings growth will be strong going forward.
• D)the firm has more cash than it needs due to a decline in future orders.
• E)dividends thereafter will be lower.

Analyze the relationship between domestic saving, domestic investment, and international capital flows.

Define foreign direct investment and foreign portfolio investment and differentiate between them.

Understand the implications of changes in net capital outflow on a country's financial position.

Interpret the dynamics of international trade and investment on economic indicators.

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Definitions:

Scientific Method

A systematic and logical approach to discovering how things in the universe work, based on making observations, forming a hypothesis, conducting experiments, and drawing conclusions.

Economic Hypotheses

Propositions or statements regarding the relationships between economic variables that can be tested with data.

Laboratory Tests

Standardized procedures conducted in a controlled environment to analyze substances, diagnose conditions, or conduct experiments.

Scientific Method

A systematic approach to research where a problem is identified, relevant data is gathered, a hypothesis is formulated from the data, and the hypothesis is empirically tested.