According to the Clientele Effect

question 2

Multiple Choice

According to the clientele effect,

• A) companies should have dividend payout ratios of either 100% or 0%.
• B) companies should avoid making capricious changes in their dividend policies.
• C) companies should change their dividend policies to please their target group of investors.
• D) even if capital markets are perfect, dividend policy still matters.

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Definitions:

Technological Advance

The introduction of new technologies or improvements in existing technologies that increase productivity and efficiency.

International Trade

The exchange of goods and services between countries, allowing for access to foreign markets and diverse products.

U.S. Firms

Entities operating under the regulatory, legal, and economic environments of the United States, engaged in commercial, industrial, or professional activities.

Life Expectancy

The average period that a person may expect to live.