1-The idea that dividend changes reflect managers' views about a firm's future earnings prospects is called the ________ hypothesis.
2-Consider the following equation: C = P + S - PV(K) - PV(Div)
In this equation, what does the term K represent?
A) the strike price of the option
B) the price of a zero-coupon bond
C) the value of the call option
D) the stock’s current price