Which of the following statements is false?
A) If firms smooth dividends, the firm's dividend choice will contain information regarding management's expectations of future earnings.
B) Because of the increasing popularity of repurchases, firms cut dividends much more frequently than they increase them.
C) Announcing a share repurchase today does not necessarily represent a long-term commitment to repurchase shares.
D) While cutting the dividend is costly for managers in terms of their reputation and the reaction of investors, it is by no means as costly as failing to make debt payments.

Question

Quizplus · Accepted Answer

Empirical evidence suggests that firms are more likely to maintain or increase their dividends than to decrease them. While the popularity of repurchases has increased, it is not true that firms cut dividends much more frequently than they increase them.

Which of the Following Statements Is False