If the information content, or signaling, hypothesis is correct, then a change in a firm's dividend policy can have an important effect on its stock price and cost of equit…

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asked May 21, 2020 166k views

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Sivagopal Manpragada · Answer 1 · 2020-05-26T10:48:29+0000

Answer:

True

Step-by-step explanation:

The Stock price changes after dividend increase or decrease do not demostrate a prefference for Dividend over retained earnnings .Rather price changes simply indicates that dividend announcement have information,or signaling ,content about future earnings.

If the information content, or signaling, hypothesis is correct, then a change in a firm's dividend policy can have an important effect on its stock price and cost of equit…

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