Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. janice believes her firm needs to send a signal to

Janice believes her firm needs to send a signal to investors. Recent projects have provided...

80.2K

Verified Solution

Question

Finance

Janice believes her firm needs to send a signal to investors. Recent projects have provided a significant increase in cash flows for the firm, and Janice suggests increasing dividend payments. Supporters for the informational role of dividends would claim __________, while opponents would claim __________.

a.

Janice believes the increase in earnings is a permanent change; Janice is only responding to recent earnings increases, with no consideration of the future.
b.

stock price should be unchanged with increased dividend payments; stock price should decrease with increased dividend payments
c.

Janice is finding the "tax efficient" level of dividend payment; Janice is enticing investors with claims of lower taxes
d.

Janice is deviating from target payout ratios and the firm's stock price will fall; Janice is applying a partial adjustment strategy
e.

Janice believes she is less informed than shareholders about the firm's prospects; shareholders only need to know about net income levels

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students