Asked by
Akshansh Tiwari
on Dec 09, 2024
Verified
If dividend clienteles exist, then ___________________________.
A) It is all the more likely that dividend policy is irrelevant.
B) Investors will prefer higher dividend payouts, on average.
C) Homemade dividends are irrelevant.
D) A firm should NOT follow a residual dividend approach.
E) Any firm can boost its share price simply by increasing its dividend.
Residual Dividend Approach
A policy for setting dividends based on a firm's residual or leftover earnings after financing planned capital expenditures.
Dividend Clienteles
Groups of investors who prefer stocks of companies with a specific dividend policy that matches their income needs and tax situations.
- Comprehend the notion of dividend clienteles and their impact on a firm's dividend strategy.
Verified Answer
KE
Learning Objectives
- Comprehend the notion of dividend clienteles and their impact on a firm's dividend strategy.