1. Dividend policy Vick Shipping paid a dividend of $1.50 last year, and Its dividend has increased steadily by about 4% a year. Vick just announced that its dividend will increase to $2.10 this year,...

1. Dividend policy
Vick Shipping paid a dividend of $1.50 last year, and Its dividend has increased steadily by about 4% a year. Vick just announced that its dividend will increase to $2.10 this year, and its stock price rose from $26 to $28 immediately after the announcement. Which of the following best explains why the price increased as it did?
Q The signaling hypothesis Q The clientele effect • The residual dividend model Q M-M dividend irrelevance
Which class of investors is more likely to be pleased by Vick's dividend announcement?
Q Investors with high tax rates who don't depend on current dividend income for living expenses Q Investors with low tax rates who depend on current dividend income for living expenses
Suppose a firm generates a lot of cash but has limited Investment opportunities. Is this stock more likely to be a utility stock or a technology stock? And is the stock likely to have a high or low dividend yield?
Q Probably a technology stock that has a high dividend yield Q Probably a technology stock that has a low dividend yield Q Probably a utility stock that has a high dividend yield Q Probably a utility stock that has a low dividend yield