Asked by
Hannah Wiggins
on Dec 01, 2024
Verified
If a company has attracted a "clientele" of shareholders who like receiving dividends and who were attracted to the firm because it does pay out most of its earnings in dividends:
A) the company would be wise to avoid changing its dividend practices.
B) the company should attempt to modify its dividend practices and find an investor clientele that favors income through capital appreciation, so it can retain earnings and grow.
C) Neither a nor b
D) Both a and b
Shareholders
Individuals or entities that own shares in a corporation, giving them a claim on part of the company's assets and earnings.
Dividend Practices
Refers to corporate policies and strategies regarding the distribution of profits to shareholders in the form of dividends.
Earnings in Dividends
This term is not standard; likely refers to the portion of a company's earnings distributed to shareholders in the form of dividends.
- Become familiar with the influence of the clientele effect on dividend policy determination.
Verified Answer
DK
Learning Objectives
- Become familiar with the influence of the clientele effect on dividend policy determination.