If a Firm Caters to a Set of Investors with Its

question 144

Multiple Choice

If a firm caters to a set of investors with its dividend policy of paying consistently high dividends, what theory is consistent with this dividend policy?

• A)Dividend Aversion Theory
• B)Dividend Irrelevance Theory
• C)Residual Dividend Theory
• D)The Clientele Effect

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Definitions:

Good Life

A concept reflecting a state of well-being, fulfillment, and happiness, often pursued through ethical and meaningful living.

Utility Principle

A principle in ethics and economics stating that the best action is the one that maximizes utility, typically defined as that which produces the greatest well-being of the greatest number.

Carol Gilligan

An American feminist, ethicist, and psychologist best known for her work on ethical community and the ethics of care, challenging traditional models of moral development.

Moral Development

The process through which individuals evolve in their understanding and application of moral concepts, behaviors, and reasoning over time.