Which of the Following Statements Is False

question 36

Multiple Choice

Which of the following statements is false?

• A) Firms adjust dividends relatively infrequently, and dividends are much less volatile than earnings. This practice of maintaining relatively constant dividends is called dividend signalling.
• B) When a firm increases its dividend, it sends a positive signal to investors that management expects to be able to afford the higher dividend for the foreseeable future.
• C) The average size of the stock price reaction increases with the magnitude of the dividend change, and is larger for dividend cuts.
• D) When managers cut the dividend, it may signal that they have given up hope that earnings will rebound in the near term and so need to reduce the dividend to save cash.

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Definitions:

Indirect Aggression

A form of aggression where harm is caused to another person through manipulation or gossip rather than physically.

Spreading Gossip

The act of sharing information, often of a personal or private nature, about others without their consent, typically resulting in negative or harmful effects.

Verbal Ability

The capacity to use language effectively and understand, interpret, and express oneself through written and spoken words.

Jacqueline Eccles

A psychologist known for her research in educational psychology, especially on adolescents' academic motivation and achievement.