Which of the Following Statements Is Most Plausible

question 113

Multiple Choice

Which of the following statements is most plausible?

• A) Increases in stock price associated with a dividend increase are likely due to information conveyed by the increase.
• B) Increases in stock price associated with a dividend increase are likely due to changes in the company's capital structure.
• C) Increases in stock price associated with a dividend increase are likely due to investors' preference for dividends over capital gains.
• D) Increases in stock price associated with a dividend increase are likely due to the favorable tax treatment of dividends over capital gains.

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