The Idea That Dividend Changes Reflect Managers' Views About a Firm's

question 32

Multiple Choice

The idea that dividend changes reflect managers' views about a firm's future earnings prospects is called the ________ hypothesis.

• A) signaling
• B) predictor
• C) instrumental
• D) none of the above

---

Definitions:

Stock Price Appreciation

The increase in the market price of a company's shares over time.

Earnings Per Share

A company's profit divided by the outstanding shares of its common stock, indicating the company's profitability on a per-share basis.

Continuing Operations

Part of a company's business that is expected to continue operating into the foreseeable future, excluding any discontinued operations.

Unusual Items

Nonrecurring or unique charges or gains that are not expected to happen regularly, such as costs from lawsuits, restructuring, or natural disasters, that are reported separately in a company's financial statements.