How can management best signal the market that a firm is doing well?

• A. Distribute a liquidating dividend
• B. Issue additional shares of stock
• C. Increase the regular dividend amount
• D. Issue stock to pay the regular dividend
• E. Replace the regular dividend with a stock dividend

Behavioral finance supports the

• A. replacement of cash dividends with stock dividends.
• B. simultaneous payment of cash dividends along with stock repurchases.

The information content of a regular dividend increase generally signals that

• A. management believes the future earnings of the firm will be strong.
• B. the firm has recently sold a subsidiary.
• C. the firm has a one-time surplus of cash.
• D. the firm has more cash than it needs due to declining sales.
• E. future dividends will be lower.

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• C. payment of dividends rather than stock repurchases.
• D. movement to end cash dividends and just have investors buy and sell shares to meet their cash needs.
• E. increased use of stock splits rather than the distribution of cash in any form.