Define believe an increased common stock cash dividend, Financial Management

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Do you believe an increased common stock cash dividend can send a signal to the common stockholders? If so, what signal might it send?

An increase in cash dividends is frequently observed as a positive signal. A company would be not similarly to increase its dividend if it did not believe its future prospects were sufficiently good to sustain the higher level of dividends. This is since the market generally frowns upon a cut in dividends.

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