Dividend Changes Are Typically Viewed by Investors as Signals of Future

question 53

Multiple Choice

Dividend changes are typically viewed by investors as signals of future changes in:

• A) investment.
• B) the firm's WACC.
• C) earnings.
• D) the clientele effect.

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Definitions:

Noncurrent Assets

Assets that are not expected to be converted into cash or used up within one year or the operating cycle, whichever is longer.

Stocks

Shares in the ownership of a company, representing a claim on the company’s assets and earnings.

Minority Interest

An ownership stake in a company that is less than 50 percent, indicating that the investor does not have control over business operations.

Outstanding Stock

Shares of a company's stock that have been issued and are currently held by investors, including public shareholders and company insiders.