A _____ effect might exist if investors are attracted to certain companies because they have particular dividend policies.

Question

Quizplus · Accepted Answer

The clientele effect refers to the phenomenon where certain investors are attracted to companies with specific dividend policies that align with their preferences. For example, some investors may prefer companies that pay high dividends, while others may prefer companies that reinvest their earnings. This can create a stable base of investors who are loyal to the company and hold onto their shares.

A _____ Effect Might Exist If Investors Are Attracted to Certain