If the information content,or signaling,hypothesis is correct,then changes in dividend policy can have an important effect on the firm's value and capital costs.

Question

Quizplus · Accepted Answer

According to the information content or signaling hypothesis, changes in dividend policy can signal important information to investors and affect the perceived value of the firm, which can in turn impact the cost of capital. Therefore, Option A is correct.

If the Information Content,or Signaling,hypothesis Is Correct,then Changes in Dividend