Some researchers and analysts have noticed a trend in which firms that increase their dividends see an increase in their stock price. The theory of explains this phenomenon.

The theory which explains the phenomenon described in the question is referred to as "Dividend Signaling".

Explanation:

When a company announces that is will be paying dividends, stock market players percieve this as an indication of :

Hence investors will find it more attractive to purchase such a stock.

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answer; /// i believe the correct answer is (all of the above);

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