A corporation announces a large increase in its annual dividend, but its stock price declines. This...
A corporation announces a large increase in its annual dividend, but its stock price declines. This could result from
A. residual dividend theory.
B. bird-in-the-hand theory.
C. perfect capital markets.
D. MM's indifference theorem.
Homework Answers
Ans A. residual dividend theory
A corporation announces a large increase in its annual dividend, but its stock price declines. This could result from residual dividend theory. This policy holds that the firm will pay dividends only out of the remaining funds after the optimum capital expenditure is incurred.
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A corporation announces a large increase in its annual dividend,
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