Firms that increase their dividend yield tend to

Name: Firms that increase their dividend yield tend to
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Increasing dividend yield typically indicates that a firm is generating more cash flows and is financially stable, which leads to a decrease in its beta (systematic risk). This is because the market views the stock as less risky and therefore tends to bid up its price, reducing its cost of equity capital.

Firms That Increase Their Dividend Yield Tend to