Dividends may be relevant because they help resolve uncertainty about the firm and its future.

Question

Quizplus · Accepted Answer

Dividends provide investors with a steady stream of income and demonstrate the firm's financial stability and ability to generate profits. By distributing profits to shareholders, the company signals that it is confident in its future earnings and growth prospects, which can alleviate concerns and uncertainty about the firm's future. Thus, dividends may be relevant in resolving uncertainty about the firm and its future.

Dividends May Be Relevant Because They Help Resolve Uncertainty About