Hackworth Oil Company is an oil drilling company. The company paid a dividend of $2.80...
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Hackworth Oil Company is an oil drilling company. The company paid a dividend of $2.80 last year, and in the past its dividend has increased steadily by 4% per year. Hackworth just announced that its dividend will increase to $3.75 this year, and its stock price rose from $35 to $38 immediately after the announcement. Which of the following theories best explains why the stock price increased as it did? The dividend irrelevance theory The clientele effect The signaling hypothesis
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