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The increase in the stock price after a dividend increase is called the information content effect because: Multiple Choice a) the dividend change signaled investors

The increase in the stock price after a dividend increase is called the information content effect because:

Multiple Choice

a) the dividend change signaled investors to adjust the risk of the firm downward.

b) the dividend change signaled shareholders that the firm could now payout less as they enter the mature phase of their business.

c) the change in dividend was expected by shareholders.

d) the dividend increase signaled investors to adjust the expectations of future earning upward.

An explanation would be nice. Thank you.

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