Red Dirt Producers Inc. is an oil-drilling company. The company paid a dividend of $1.50 last year, and, in the past, its dividend has increased steadily by about 4% a year. Red Dirt just announced that its dividend will increase to $2.10 this year, and its share price rose from $28 per share to $30 per share immediately after the announcement. Which of the following best explains why Red Dirt's stock price increased as it did? The signaling hypothesis Dividend irrelevance theory The clientele effect Modigliani and Miller argued that each shareholder can construct his or her own dividend policy. This statement is: False True