Assuming that economic conditions remain stable, any management action that would cause current and prospective stockholders to raise their dividend expectations should decrease the firm's value.

Question

Quizplus · Accepted Answer

If management takes actions that increase dividend expectations, such as improving the company's financial performance or initiating a dividend payout, it can increase stockholder confidence and attract new investors, which can increase the firm's value. Therefore, any management action that increases dividend expectations can potentially increase the firm's value.

Assuming That Economic Conditions Remain Stable, Any Management Action That