1. What is a fi rm’s dividend yield? How does this compare with that fi rm’s dividend payout ratio? 2. What is the average stock market reaction to: (a) a dividend initiation; (b) a dividend increase;...

2. What is the average stock market reaction to: (a) a dividend initiation; (b) a dividend increase; (c) a dividend termination; and (d) a dividend decrease (cut)? Are these reactions logically consistent?