Question
Instead of the agency cost hypothesis can you explain free cash flow hypothesis. Market reacts positively to dividend increases and negatively dividend decreases. Three explanations
Instead of the agency cost hypothesis can you explain free cash flow hypothesis.
Market reacts positively to dividend increases and negatively dividend decreases. Three explanations are provided for this notion.
- Information content (signalling) hypothesis,
- Free cash flow hypothesis
- Clientele effect
Discuss these hypotheses related to dividend policy.
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Managerial Accounting
Authors: Ray H Garrison, Alan Webb, Theresa Libby
11th Canadian Edition
1259275817, 978-1259275814
