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:

Companies

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Performance Measure

A metric or indicator used to gauge the effectiveness, efficiency, or productivity of a job, process, or employee.

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Social Networking Site

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