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Zorellian Oil Company is an oil drilling company

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Zorellian Oil Company is an oil drilling company. The company paid a dividend of $3.10 last year, and in the past its dividend has increased steadily by 4% per year. Zorellian just announced that its dividend will increase to $4.20 this year, and its stock price rose from $38 to $40 immediately after the announcement. Which of the following theories best explains why the stock price increased as it did? The signaling hypothesis The dientele effect Dividend irrelevance theory Modigliani and Miller argued that each shareholder can construct his or her own dividend policy. This statement is: O False True more less Modigliani and Miller also pointed out For these investors, dividend policy is less hy institutional investors do not pay taxes and can buy and sell stocks with very low. transaction costs relevant than it is for an individual investor