[amp_mcq option1=”Increasing Dividend” option2=”Decreasing Dividend” option3=”Constant Dividend” option4=”None of the above” correct=”option1″]<\/p>\n
The correct answer is: A. Increasing Dividend.<\/p>\n
Walter’s Model suggests that a firm can always increase the price of its shares by increasing its dividend. This is because investors are willing to pay more for a share of a company that pays a higher dividend. The higher dividend indicates that the company is profitable and is able to return money to its shareholders.<\/p>\n
Decreasing or keeping the dividend constant will not necessarily lead to an increase in the price of the shares. This is because investors may not be willing to pay more for a share of a company that is not paying a dividend or is paying a lower dividend.<\/p>\n
Here is a brief explanation of each option:<\/p>\n
[amp_mcq option1=”Increasing Dividend” option2=”Decreasing Dividend” option3=”Constant Dividend” option4=”None of the above” correct=”option1″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[945],"tags":[],"class_list":["post-56197","post","type-post","status-publish","format-standard","hentry","category-financial-management","no-featured-image-padding"],"yoast_head":"\n