An example of the existence of an information content effect of dividends is when Telus's share price drops by 33% after it announces it is omitting its regular quarterly dividend payment.

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The information content effect of dividends suggests that changes in dividend policy can signal management's view of future earnings prospects. When Telus omits its regular quarterly dividend, it may signal to investors that the company is not performing well or does not expect to perform well in the future, leading to a drop in share price.

An Example of the Existence of an Information Content Effect