The Increase in the Stock Price After a Dividend Increase

question 32

Multiple Choice

The increase in the stock price after a dividend increase is called the information content effect because:

• A) the change in dividend was expected by shareholders.
• B) the dividend increase signaled investors to adjust the expectations of future earning upward.
• C) the dividend change signaled investors to adjust the risk of the firm downward.
• D) the dividend change signaled shareholders that the firm could now payout more as they enter the mature phase of their business.

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Definitions:

Feminization of Poverty

Refers to the phenomenon where women represent disproportionate percentages of the world's poor, often due to lower wages, unemployment, and bearing the sole responsibility for child care.

Misogyny

An ingrained prejudice against women; dislike, contempt, or hatred of women.

LGBTQ People

Individuals who identify as lesbian, gay, bisexual, transgender, queer or questioning, representing a diverse range of sexual orientations and gender identities.

Same-Sex Marriage

Federally recognized marriage between members of the same sex; made legal in the United States in 2015.