Asked by
Natalie Gonzalez
on Nov 07, 2024Verified
The clientele effect states that stocks:
A) Are divided into groups based on their overall level of risk.
B) Are sold to various groups depending upon their industry.
C) Conform to various risk elements based on their volatility.
D) Can be divided into groups based upon their sales to individuals versus institutions.
E) Attract certain investor groups based on the dividend yield and the tax effects.
Clientele Effect
This concept suggests that changes in a company’s dividend policy can attract different types of investors, based on their preferences for dividend payouts.
Dividend Yield
A fiscal ratio indicating the annual dividends a company dispenses in relation to its stock price.
Tax Effects
The impact of tax laws on the financial performance of a company or the net income of an individual, including deductions, exemptions, and liabilities.
- Describe the process through which corporations establish their dividend distributions, taking into account their strategic growth objectives and the demographics of their shareholders.
Verified Answer
JM
Learning Objectives
- Describe the process through which corporations establish their dividend distributions, taking into account their strategic growth objectives and the demographics of their shareholders.