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3. The clientele effect suggests that: a. Some investors count on dividends as a steady source of income and expect companies that pay dividends to
3. The clientele effect suggests that: a. Some investors count on dividends as a steady source of income and expect companies that pay dividends to continue to do so. b. Investors who are looking for income tend to dividends c. Investors who are looking for price appreciation gravitate toward stocks that pay dividends regularly d. Both a. and b. are correct. e. All of the above are correct. 9. Dividend payments reduce all of the following balance sheet items except; a. cash b. fixed assets. c. stockholder's equity d. retained earnings 10. Which of the following best describes the dividend decision in terms of benefits for the stockholder? a. Paying dividends creates a short-term benefit, while retaining earnings has the potential to be a long-term benefit. b. Paying dividends creates a long-term benefit, while retaining earnings has the potential to be a short-term benefit. c. Paying dividends and retaining earnings both create short-term benefits. d. Paying dividends and retaining earnings both create long-term benefits. e. The decision to pay dividends or retain earnings has little impact on the stockholder
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