Question: A theory that says that dividend policy does affect the value of the firm because dividends constrain the ability of managers to hoard cash and/or

A theory that says that dividend policy does affect the value of the firm because dividends constrain the ability of managers to hoard cash and/or invest it unwisely is called ________.

Select one:

a. signaling theory

b. dividend irrelevance theory

c. agency cost theory

d. informational content theory

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