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:

Unconscious Motives

Drives or desires that influence an individual's behavior or decisions without their conscious awareness.

Cognitive Processes

Mental activities involved in acquiring, storing, retrieving, and using information, including perception, memory, thinking, and problem-solving.

Psychotherapy

A form of treatment for mental health issues that involves talking with a therapist to understand and overcome problems.

Functionalism

A theoretical perspective in sociology and anthropology that interprets society as a structure with interrelated parts designed to meet the biological and social needs of individuals that make up that society.