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.

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Definitions:

Negotiating Party

A negotiating party refers to an individual or group involved in discussions aimed at reaching an agreement or compromise on specific matters.

Written Agreement

A formal document in which the parties involved agree to certain terms and conditions that are put in writing.

Personal Rapport

The process of building a close and harmonious relationship in which the people or groups involved understand each other’s feelings or ideas and communicate well.

Conciliator

A person who acts as a mediator or intermediary to help resolve conflicts or disputes.