Question

Which of the following hypotheses/theories suggests that investors regard a change in dividend payments as a signal that the firm's management expects future earnings to also change? a. Clientele effect theory b. Constant payout ratio hypothesis c. Dividend modification hypothesis d. Information content hypothesis e. Projected earnings hypothesi

Answer 1

Answer:

C

Step-by-step explanation:

Dividend policy (hypothesis) of firms as stated by Musa (2009) is a cultural phenomenon that changes continuously according to environment and time, hence it is necessary to continuously modify dividend behavioural models to capture those factors that are peculiar to a particular period and environment, as well as changes in tax.

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