Which of the following is true regarding the information effect of dividend policies?
A) Increases in dividends are seen as negative signals concerning the firm's performance.
B) Increases in dividends are seen as negative signals concerning the firm's expected future cash flow levels.
C) If a firm announces an increase in the next dividend, analysts see such announcements as a very positive signal.
D) If a firm announces an increase in the next dividend, analysts see such announcements as a very negative signal.
Correct Answer:
Verified
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