Merrick Manufacturing Has Been in a Court Battle Over Alleged

Multiple Choice

Merrick Manufacturing has been in a court battle over alleged patent infringement for several years. If Merrick has had generally paid out a consistent level of dividends and increases its dividend payout by 50%, how investors may interpret this move by Merrick?

A) As reorganizing its dividend policies based on company investment and tax requirements and correctly ignore the on-going case.
B) As distributing cash it no longer needs for investment as it anticipates losing the court case and its patent rights.
C) As attempting to placate investors who will sell off their shares once information about the loss of the court case is announced.
D) As winning the court case and being restricted by the settlement from officially announcing the company's good fortune.
E) As anticipating a settlement in its favour and distributing expected future earnings.