JBC CorpDeclared a Dividend of $2 Per Share,which Was an Increase

question 10

Multiple Choice

JBC Corp.declared a dividend of $2 per share,which was an increase of 25% from the prior year,yet JBC Corp.stock declined by 3% the day of the announcement.RBG Corp.declared a dividend of $2 per share,which was the same as the prior year,and its stock increased in value by 2% on the day of the announcement.These events could be most readily explained by the

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