Market reacts positively to dividend increases and, Ask an Expert

Finance

Market reacts positively to dividend increases and negatively dividend decreases.

Three explanations are provided for this notion.

i. Information content (signalling) hypothesis,

ii. Free cash flow hypothesis

iii. Clientele effect

Discuss these hypotheses related to dividend policy.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92373261

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