The observed empirical fact that stocks attract particular investors based on the firm's dividend policy and the resulting tax impact on investors is called the

Question

Quizplus · Accepted Answer

The observed empirical fact mentioned in the question is known as the clientele effect. This concept suggests that different investors are attracted to stocks based on their dividend policies and the tax implications that result from them. For example, investors who rely on regular income may be attracted to stocks with high dividend yields, while others who are more interested in capital gains may prefer stocks with lower dividend payouts. This phenomenon can create a stable base of investors for a particular stock, which can affect its price and trading volume over time.

The Observed Empirical Fact That Stocks Attract Particular Investors Based