When firms increase dividends, stock prices tend to increase. One reason given for this price reaction is

Question:

When firms increase dividends, stock prices tend to increase. One reason given for this price reaction is that dividends operate as a positive signal. What is the increase in dividends signaling to markets? Will markets always believe the signal? Why or why not?
Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question
Question Posted: