The Signaling Model of Dividends Predicts

question 79

Multiple Choice

The signaling model of dividends predicts

• A) managers of firms with high growth opportunities "signal" these good investments with low dividends
• B) managers expecting higher future earnings "signal" with higher dividends
• C) stock prices will fall at dividend increases.
• D) lower quality firms will have larger dividend payouts due to poorer future prospects.

---

Definitions:

Simulation

The process of creating a model or representation of a real-world scenario to study its behavior under different conditions without the risk of real-world consequences.

Model Demand And Supply

The model of demand and supply is a fundamental concept in economics that describes how prices vary as a result of a balance between product availability and the desires of consumers.

Scenario Planning

A strategic planning method used by organizations to make flexible long-term plans based on anticipating possible future scenarios and their impacts on business.

HR Demand

The need within an organization for human resources to fill specific roles or accomplish tasks.