When an unexpected change in dividend policy develops,investors may attach informational content to the events.

Question

Quizplus · Accepted Answer

Investors may interpret a change in dividend policy as an indication of the company's financial health, growth prospects, or management strategy. Therefore, a surprising shift in dividend payments may convey significant information about the company's future prospects and could affect investors' valuation and decision-making.

When an Unexpected Change in Dividend Policy Develops,investors May Attach