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In general, managers have more information about the company than outside investors. Therefore, changes in dividends can send signals to investors. Suppose that a firm

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In general, managers have more information about the company than outside investors. Therefore, changes in dividends can send signals to investors. Suppose that a firm increased its dividend. Part a) [5 pts] Under what scenario would this send a good signal to investors? Part b) [5 pts] Under what scenario would this send a bad signal to investors

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