The ______ Effect Is the Tendency of a Firm to Attract

question 9

Multiple Choice

The ______ effect is the tendency of a firm to attract the type of investor who prefers its dividend policy. 

• A)residual dividend
• B)clientele
• C)signaling
• D)investor
• E)dividend preference

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Definitions:

Allowances

Reductions from the gross amount due to defects or allowances for customer discounts, contributing to the net sales figure.

W-4 Form

A tax form used by employees to indicate their tax situation to their employer, such as number of dependents and marital status, affecting the amount of federal income tax withheld from their pay.

FICA-Medicare

A federal payroll tax that funds Medicare, the U.S. health insurance program for individuals aged 65 and over or who meet other specific criteria.

Gross Wages

Gross Wages refer to the total amount of compensation earned by an employee before any deductions or taxes are taken out.