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

question 21

Multiple Choice

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

• A)signalling
• B)predictor
• C)instrumental
• D)pecking order
• E)dividend growth

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Definitions:

Complements

Goods or services that are used together, where an increase in the demand for one leads to an increase in demand for the other.

Demand Curve

A chart that illustrates the correlation between the cost of a product and the amount of the product buyers are prepared and can afford to buy at different price levels.

Complements

Goods that are consumed together because the use of one increases the value of the other, often seen in products that are used in conjunction.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded by consumers.