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The "information effect" refers to the notion that:

  1. a corporation's actions may convey information about its future prospects.

 

2. management is reluctant to provide financial information that is not required by law.

 

3. agents incur costs in trying to obtain information.

 

4. the financial manager should attempt to manage sensitive information about the firm.

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Question added by Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies
Date Posted: 2015/06/09
Upvote (2) Views (4) Followers (3) Answers (3) Report Question
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Shahbaz Hayder
by Shahbaz Hayder , Group Head of Finance , Sharif Group of Companies

Yes Option1 is the right answer.

Zehab Osman
by Zehab Osman , Accountant , Aldar Consultancy Co.

no1 -----------------------------------------

Shazia Anees
by Shazia Anees , Assistant Manager Finance , Arham Trading Company

  1. a corporation's actions may convey information about its future prospects.

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