Which of the Following Is True of Equity Returns at the Time

question 17

Multiple Choice

Which of the following is true of equity returns at the time of dividend announcements?

• A)Share prices decrease,on average,when firms increase dividends.
• B)Dividend increases can diminish intrinsic values of firms.
• C)Financial decisions that convey favourable information to the market tend to decrease share prices,when the decisions are bad for the firm's future profitability.
• D)When earnings predictions are released at the same time,dividends lose their predictive power and signalling content.

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Definitions:

Learning Strategy

A planned approach or set of tactics used to facilitate the process of acquiring knowledge or skills.

Increasingly Longer

Describing something that is gradually extending or growing in duration over time.

Partial Reinforcement

In behavioral psychology, this refers to a conditioning schedule where only some of the responses are followed by a reward, making a behavior more resistant to extinction.

Unpredictable Occasions

Events or situations that occur without forewarning and cannot be anticipated based on prior experience or knowledge.