The dividend ____ states that investors will tend to be attracted to firms that have dividend policies consistent with the investor's objectives.   a. "clientele effect"   b. "informational content"   c. passive residual theory   d. signal

Q: Which of the following performance measures is the most appropriate for an investor who is not fully…

A: M-squared is considered as the most appropriate for those investors who is not full diversified

Q: Outline the main features of the Stable Dividend Growth policy and explain the type of company this…

A: Stable Dividend Growth policy is the policy adopted by the financial managers in which the dividends…

Q: Investors can form earnings growth expectations from various sources, including ___

A: Investors can form earnings growth expectations from currant earnings and retention rates.  Growth…

Q: In this section we examine three theories of investor preference: The dividend irrelevance theory.…

A: Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: __________ focus more on underlying determinants of future profitability than the past price…

A: The investor predicts the future price movements of the stocks using past patterns. Different…

Q: One of the following decisions is not taken to increase the stock price: Select one: a. Maximize…

A: The Following decision will increase the stock price: Maximize the income or profit from the income…

Q: Firms must provide the right incentives if they are to get -Select-shareholderscreditorsmanagersItem…

A: Filled in the Blanks    Firms must provide the right incentives if they are to get managers to focus…

Q: Which of the following are false? I) Managers are reluctant to make dividend changes that might have…

A: As per Lintner’s stylized facts, Managers are reluctant to make the dividend changes that might have…

Q: If a large group of investors tend to buy a company's stock, an individual might follow too. This…

A: Self Attribution is the another name of person's perception. It is the process of defining the…

Q: According to the clientele effect, which (potential) investors might be attracted by high dividend…

A: The clientele effect explains the movement in the price of the stock of a company. The price moves…

Q: We can imagine the financial manager doing several things on behalf of the firm's stockholders. But…

A: There financial managers are hired to carry out various financial function functions such as…

Q: A qualitative factor (as opposed to a quantitative factor) that managment should consider when…

A: Qualitative factors are the ones which can be measured in quality. Where as quantitative factors can…

Q: The dividend ____ states that investors will tend to be attracted to firms that have dividend…

A: The dividend "CLIENTELE EFFECT" states that investors will tend to be attracted to firms that have…

Q: In the theoretical world of Miller and Modigliani, ____.   a. a firm should pay out 100% of…

A: According to Miller and Modigliani, in a perfect capital market there is no transaction cost and…

Q: Discuss the real-world factors that would encourage firms to follow a high dividend policy.

A: Company is earning profit every year mostly which will be divided into two ways. Firstly, the…

Q: Is this statement true or false? Give a reason for your answer. " Relevant or not, frequent changes…

A: Dividend policy is a policy that determines the division of earnings into dividend and retained…

Q: Indicate whether its TRUE or FALSE. Then give an explanation. Firms concerned with the sharemarket…

A: Dividends often tend to be sticky in most cases because companies are reluctant to change dividends…

Q: The cost of equity capital for non-dividend paying stocks can be determined by ____. I. using the…

A: CAPM = Risk free Rate + Beta * Market Risk Premium

Q: Why do the clientele effect and the information contenthypotheses imply that investors prefer stable…

A: Clientele effect means the preference of different categories of investors to invest in specific…

Q: The residual dividend approach is the best dividend policy to adopt if a firm’s management wants to…

A: I believe that, residual dividend policy is a good approach when the management aims at maximizing…

Q: The possible returns from investing in BestMax share are as follows: State of economy Probability…

A: The relationship between financial decision-making and risk is quite simple. The greater the risk…

Q: investors would normally prefer the firm to have a higher dividends coverage ratio True Fales

A: If the dividend coverage ratio is more than 1, it means that the earnings generated by the firm are…

Q: The commonly accepted goal of the MNC is to: A. maximize short-term earnings. B. maximize…

A: The question is based on the concept objective of running business. A multinational corporation…

Q: One reason why small business concerns have very low dividend payout ratios is that the firm ____.…

A: The dividend payout ratio is the ratio that states the amount of the dividends paid by the company…

Q: 10.Which of the following statement on stock valuation is incorrect? a.In dividend discount model,…

A: Firm valuation is the process of estimating the value of a firm. This is generally based on the…

Q: a. Consider two investment opportunities A and B. Investment A: Expected return =0.08, Standard…

A: Since you have posted multiple questions, we will answer the first one for you. If you want a…

Q: Modigliani and Miller on the one hand, and Gordon and Linter on the other hand, have expressed…

A: MM’s views are: The company’s investment policy is generally fixed. Hence the policy of dividend is…

Q: 1. The P/E method of valuation is appropriate for Value investors.  What does it mean if the P/E…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Identify the decision rule that best fits each of the following descriptions. (3)   Direct…

A: Capital budgeting refers to the process of analyzing whether the organization's long-term investment…

Q: Is this statement true or false? Give a reason for your answer. "The homemade dividend strategy…

A: homemade dividend strategy is a strategy wherein the dividend paying is seen as irrelevant because…

Q: Dividend policy and company value: You have just encountered two identical companies with identical…

A: A dividend policy is an important policy, it changes the valuation of a company.  If a company is…

Q: 8. Each of the following is sometimes listed as a reasonable objective for a firm: (a) maximize…

A: Investment decisions are the decisions taken by the investors and top management to use the funds or…

Q: How the RISK affects EFFICIENCY (operational or financing) that subsequently affects RETURN (for…

A: A shareholder is an individual or company who owns shares in a company. Shareholders are granted…

Q: Dividend policy can affect the value of the firm for which of the following reasons?   a. Personal…

A: 1. Dividend policy can affect the value of the firm for which of the following reasons  d. all of…

Q: True or False Please answer both. 1. High cash flow is generally associated with a higher share…

A: Statement 1 : High cash flow is generally associated with a higher share price whereas higher risk…

Q: Discuss and explain why the following are considered as factors affecting dividend policy? Give some…

A: Company is adopting the process of operating activities with an intention of producing goods for the…

Q: Which of the following is an appropriate goal for the firm? Select one:  a. All of these b. In…

A: Secondary Market: Secondary markets are where investors may purchase and sell assets that they…

Q: The primary operating goal of a publicly-owned firm trying to best serve its stockholders should be…

A: A publicly-owned firm is a public company whose capital is raised through the public issue and were…

Q: tock exchanges want to be sure that investors have enough information to Select one: a. Increase a

A: Company performance and prospects represents the information regarding the company performance,…

Q: Dividend changes may be used by management as a credible communication tool to signal investors…

A: A perfect capital market is the one where there are no arbitrage opportunities are present.