The Clientele Effect Maintains That Many Investors Choose Stocks at Least

question 16

Multiple Choice

The clientele effect maintains that many investors choose stocks at least in part for dividend policy, so any change in payments is disruptive, because it represents:

• A)uncertainty in the treatment of capital gains.
• B)something new about which they are uncertain.
• C)risk, to which investors are generally averse.
• D)change away from something they like about the firm.

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Definitions:

Accumulated Depreciation

The total depreciation for a fixed asset that has been charged to expense since that asset was acquired and made available for use.

Manufacture Further

The process of additional or continued production to create finished goods from raw materials or components.

Inventory Cost

The total cost associated with acquiring, storing, and managing inventory, including purchase prices, delivery charges, and taxes.

Process Further

The decision-making process regarding additional operations on a product based on cost and value-added considerations.