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Q: Dividend changes may be used by management as a credible communication tool to signal investors about future earnings under which of the following dividend policy theories? (Points : 1) the
clientele effect the residual dividend theory the information effect the expectations theory
A: the clientele effect the residual dividend theory is applicable here. A residual dividend policy is one where a company uses residual or leftover equity to fund dividend payments. [ Typically, this method of dividend payment creates volatility in the dividend payments that may be undesirable for some investors. Read more: ]
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User: Dividend changes may be used by management as a credible communication tool to signal investors about future earnings under which of the following dividend policy theories? (Points : 1) the clientele effect the residual dividend theory the information effect the expectations theory

Weegy: the clientele effect the residual dividend theory is applicable here. A residual dividend policy is one where a company uses residual or leftover equity to fund dividend payments. [ Typically, this method of dividend payment creates volatility in the dividend payments that may be undesirable for some investors. Read more: ]
piash|Points 2796|

User: Dividend changes may be used by management as a credible communication tool to signal investors about future earnings under which of the following dividend policy theories? (Points : 1) the clientele effect the residual dividend theory the information effect the expectations theory

Weegy: the clientele effect the residual dividend theory is applicable here. A residual dividend policy is one where a company uses residual or leftover equity to fund dividend payments. [ Typically, this method of dividend payment creates volatility in the dividend payments that may be undesirable for some investors. Read more: ]
piash|Points 2796|

User: Dividend changes may be used by management as a credible communication tool to signal investors about future earnings under which of the following dividend policy theories? (Points : 1) the clientele effect the residual dividend theory the information effect the expectations theory





Weegy: the residual dividend theory would be the correct answer. [www.transtutors.com/questions/tts-dividend-changes-may-be-used-by-management-as-a-credible-communication-tool-173796.htm] Residual Dividend Policy Steps: 1) Determine the optimal [ capital budget. 2) Determine the retained earnings that can be used to finance the capital budget. 3) Use retained earnings to supply as much of the equity investment in the capital budget as necessary. 4) Pay dividends only if there are left-over earnings. ]
Expert answered|piash|Points 2796|

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Asked 8/25/2012 7:47:56 PM
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