Dividend Changes May Be Used by Management as a Credible

question 62

Multiple Choice

Dividend changes may be used by management as a credible communication tool to signal investors about future earnings under which of the following dividend policy theories?

• A) the clientele effect
• B) the residual dividend theory
• C) the information effect
• D) the expectations theory

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Definitions:

McDonaldization

Refers to the process by which the principles of fast-food restaurants are coming to dominate more and more sectors of society, promoting efficiency, calculability, predictability, and control.

Rationalism

A philosophy which emphasizes reason as the primary source of knowledge and justification over sensory experience.

National Priorities

The objectives or goals that a country considers most important and urgent for its development and welfare.

National Opinion Research Center

An independent research organization at the University of Chicago focusing on social science research to guide and inform public opinion and policy.