The Clientele Argument in Dividend Theory Implies That

question 11

Multiple Choice

The clientele argument in dividend theory implies that:

• A)investors are indifferent between dividends and capital gains.
• B)firms should pay out dividends only after accepting all capital budgeting projects with positive NPVs.
• C)the stock of low-payout firms will be held by investors seeking capital gains.
• D)the dividend payout should be set equal to the industry average.

---

Definitions:

Latest Finish Time

In project management, the latest possible point in time by which an activity must be completed without delaying the project.

Surplus Quantity

The amount by which the quantity supplied of a product exceeds the quantity demanded at a specific price.

Newsvendor Model

A mathematical model used in operations management and economics to determine optimal inventory levels for perishable or single-period products, balancing the costs of inventory shortage and overage.

Customer Arrivals

The frequency or rate at which customers enter a system, store, or facility.