Reformers Have Tried to Regulate Some of the Most Troublesome

question 66

Short Answer

Reformers have tried to regulate some of the most troublesome abuses of the politics of factions, and one practice that has been targeted is the so-called __________.

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Definitions:

Strict Residual Dividend Policy

A dividend policy in which dividends are based on the earnings left over after all operating expenses, taxes, and project investments are covered.

Dividend Payout Ratio

The percentage of earnings paid to shareholders in dividends, calculated as dividends per share divided by earnings per share.

Clientele Effect

The attraction of companies with specific dividend policies to those investors whose needs are best served by those policies. Thus, companies with high dividends will have a clientele of investors with low marginal tax rates and strong desires for current income. Similarly, companies with low dividends will attract a clientele with little need for current income and who often have high marginal tax rates.

Investment Opportunities

Investment Opportunities refer to avenues or instruments that offer potential for financial return, such as stocks, bonds, real estate, or other assets.