If Generic Company's stock goes up after a dividend is announced, it could be because the payout of the dividend aligns management objectives with shareholder objectives and controls management by having them justify expenditures on projects through prospectuses, etc. Which of the following would best describe this?
A) Agency theory
B) Residual theory
C) Signaling theory
D) Tax clientele theory
E) "Bird in the hand " theory
Correct Answer:
Verified
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