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Janice believes her firm needs to send a signal to investors. Recent projects have provided...

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Finance

Janice believes her firm needs to send a signal to investors. Recent projects have provided a significant increase in cash flows for the firm, and Janice suggests increasing dividend payments. Supporters for the informational role of dividends would claim __________, while opponents would claim __________.

a.

Janice believes the increase in earnings is a permanent change; Janice is only responding to recent earnings increases, with no consideration of the future.
b.

stock price should be unchanged with increased dividend payments; stock price should decrease with increased dividend payments
c.

Janice is finding the "tax efficient" level of dividend payment; Janice is enticing investors with claims of lower taxes
d.

Janice is deviating from target payout ratios and the firm's stock price will fall; Janice is applying a partial adjustment strategy
e.

Janice believes she is less informed than shareholders about the firm's prospects; shareholders only need to know about net income levels

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