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:

Consent Order

A consent order is a legal document in which parties in a dispute agree to a resolution without admitting guilt or wrongdoing, often used in regulatory matters and family law disputes.

Disputed Behavior

Refers to actions or conduct that are contended or contested by one or more parties in a legal or formal setting.

Injunction

A court order that either prohibits a party from doing a specific act (restraining order) or orders a party to carry out a specific act (mandatory order), typically to prevent harm or to preserve the status quo during litigation.

Civil Lawsuit

A legal action taken by one party against another for the purpose of resolving a dispute or claiming damages.