The Information Effect Hypothesis Implies That Increasing Dividends Provides a More

question 169

True/False

The information effect hypothesis implies that increasing dividends provides a more credible signal of higher future earnings than does management's assertion that future earnings will be higher.

---

Definitions:

Nonfinancial Performance Measures

Nonfinancial performance measures are metrics used to assess a company's efficiency, quality, or performance in areas not directly related to financial metrics, such as customer satisfaction or employee engagement.

Leading Indicators

Economic factors that change before the economy starts to follow a particular pattern or trend, used to predict future economic activities.

Future Financial Performance

Predictions or estimates regarding a company's revenue, expenses, and profitability in upcoming periods.

Customer Satisfaction Rating

A measure used by businesses to evaluate the degree to which their products or services meet or surpass customer expectations.