Assume That as the Result of a Firm Announcing a Large

question 120

Multiple Choice

Assume that as the result of a firm announcing a large unexpected increase in its dividend payment,the price of the firm's ordinary shares rises.This event would be consistent with which of the following?

• A)The dividend irrelevance theory
• B)The tax preference theory
• C)An information signaling effect
• D)The beta effect

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Definitions:

S Data

Self-report data, where individuals provide information about themselves, typically through surveys or questionnaires.

I Data

Informants’ data, or judgments made by knowledgeable informants about general attributes of an individual’s personality.

Heuristic Errors

Heuristic errors refer to mistakes made in judgment or decision-making processes due to the use of simple and efficient rules (heuristics) that the human brain uses to process information quickly but sometimes inaccurately.

Biases

A tendency to lean in a certain direction, either in favor of or against something, often without a neutral standpoint.