Which of the Following Is $\underline{not}$ True Regarding Earnings and Dividends?
A)Managers Adjust Dividends Primarily to Dividends

question 68

Multiple Choice

Which of the following is $\underline{not}$ true regarding earnings and dividends?

• A)Managers adjust dividends primarily to reflect the change in current earnings.
• B)Stock price may be modeled as the present value of future expected dividends.
• C)Investors regard cash dividends as credible signals of future performance.
• D)Current income has a value in predicting future dividends.

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Definitions:

Serial Position Effect

A memory phenomenon where recall accuracy varies as a function of an item's position within a study list, often showing enhanced memory for items at the beginning and end of the list.

Primacy Effect

The tendency for individuals to remember information presented at the beginning of a list better than information appearing in the middle or end.

Recency Effect

A cognitive bias which results in better recall of the most recent items or experiences in a series due to their late position in memory retrieval.

State-Dependent Memory Effect

The tendency to recall information better if one is in the same pharmacological or psychological state as when the information was encoded.