Generally,investors interpret the announcement of an increase in dividends as:
A)bad news and the stock price drops.
B)good news and the stock price increases.
C)a nonevent and does not affect the stock price.
D)very bad news and the stock price plunges.

Question

Quizplus · Accepted Answer

Investors generally interpret the announcement of an increase in dividends as good news and the stock price increases. This is because an increase in dividends indicates that the company is generating more profits and has enough cash to distribute to its shareholders, which increases the attractiveness of the stock to investors.

Generally,investors Interpret the Announcement of an Increase in Dividends As