Which of the Following Can Be a Benefit of the Clientele

question 37

Multiple Choice

Which of the following can be a benefit of the clientele effect?

• A) New investors who were previously uninterested in the stock may be attracted to it because of a policy change.
• B) If firms change their dividend policy, the investors who desire the previous policy will sell their shares.
• C) If the firms change their dividend policy, the investors will be unaffected by the change due to the dividend irrelevance theorem.
• D) If the firms change their dividend policy, it will maximize shareholder wealth.

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Definitions:

Annual Cost

The total amount spent on a particular item, service, or operation over the course of a year.

Insurance Claims

Requests made to an insurance company for payment based on the terms of an insurance policy.

Medical Practice

The profession or activity of providing care to patients, involving diagnosis, treatment, and prevention of diseases.

Filing Limit

The maximum time period allowed after an event within which legal proceedings may be initiated or claims must be submitted.