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Financial Markets React When a Firm Pays or Chooses Not

Question 108

Multiple Choice

Financial markets react when a firm pays or chooses not to pay a dividend. A dividend announcement is a way for management to send a message to shareholders.   This is known as the __________________. ​


A) Clientele Effect​
B) Residual Dividend Theory​
C) Signaling Effect​
D) Expectations Theory​

Correct Answer:

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