Question

3. Explain the information content, or signaling, hypothesis and the clientele effect?

Answer 1

The information content is widely cited in the financial literature .The information content of dividend hypotheses is a firm specific hypothesis which contents that managers of a firm use the dividend to signal asymmetric information about the firms future earnings . Clientele effect describes how current investors react to substantial changes in a company 's policies .Clientele effect describes the way in which individual investors seek outstocks from a specific category .