Red Dirt Producers Inc. is an oil-drilling company. The comparty paid a dividend of $2.20 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 $2.90 this year, and its share price rose from $33 per share to $35 per share immediately after the announcement. Which of the following best explains why Red Dirt's stock price increased as it did? O Dividend irrelevance theory The clientele effect The signaling hypothesis Modigliani and Miller argued that each shareholder can construct his or her own dividend policy. This statement ist O True False Modigliani and Miller also pointed out that many institutional investors do not pay taxes and can buy and sell stocks with very low transaction costs. For these investors, dividend policy is relevant than it is for an individual investor Another firm, called Robbem Power & Water an established public utility company, has been paying dividends for the past 20 years. This year Robbem also announced that it will increase its dividends by 10%. Which class of investors is more likely to be pleased by Robbem's dividend announcement? Investors with high tax rates who don't depend on current dividend income for living expenses Investors with low tax rates who depend on current dividend income for living expenses A firm's dividend policy determines its current clientele of investors Red Dirt Producers Inc. is an oil-drilling company. The comparty paid a dividend of $2.20 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 $2.90 this year, and its share price rose from $33 per share to $35 per share immediately after the announcement. Which of the following best explains why Red Dirt's stock price increased as it did? O Dividend irrelevance theory The clientele effect The signaling hypothesis Modigliani and Miller argued that each shareholder can construct his or her own dividend policy. This statement ist O True False Modigliani and Miller also pointed out that many institutional investors do not pay taxes and can buy and sell stocks with very low transaction costs. For these investors, dividend policy is relevant than it is for an individual investor Another firm, called Robbem Power & Water an established public utility company, has been paying dividends for the past 20 years. This year Robbem also announced that it will increase its dividends by 10%. Which class of investors is more likely to be pleased by Robbem's dividend announcement? Investors with high tax rates who don't depend on current dividend income for living expenses Investors with low tax rates who depend on current dividend income for living expenses A firm's dividend policy determines its current clientele of investors