Each theory predict to happen to security prices

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If a company were to increase dividends, what would each theory predict to happen to security prices and why?

Signaling Theory of dividends:

             Stock prices:

             Bond prices:

Agency Cost Theory of dividends (also known as inside-outside stockholder agency cost):

              Stock prices:

              Bond prices:

Risk Shifting Theory of dividends (better known as stockholder-bondholder agency cost):

              Stock prices:

              Bond prices:

Reference no: EM131607785

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