A relatively simple view of dividend changes is that an announced increase in divdends is a(n) _____ that management has increased its assessment of the firm's future earnings.

Question

Quizplus · Accepted Answer

A dividend increase is a signal to investors that management is confident in the company's future earnings potential. It is not a direct measure or index of the company's performance, nor is it an unbiased estimate.

A Relatively Simple View of Dividend Changes Is That an Announced