Final answer:
Dividend payments can serve as a signal to shareholders about managers' expectations of the firm's future performance.
Step-by-step explanation:
The statement Dividend payments can serve as a signal to shareholders about managers' expectations of the firm's future performance is True.
Dividend payments are cash or stock distributions made by a company to its shareholders.
By paying dividends, managers are indicating their confidence in the firm's financial health and future prospects.
For example, if a company consistently increases its dividend payments over time, it suggests that the company is generating strong profits and expects to continue doing so in the future.
On the other hand, if a company reduces or eliminates its dividend, it may signal financial difficulties or an expectation of lower future performance.