Question
Which of the following statements is correct? a. The clientele effect can explain why so many firms change their dividend policies so often. b. New-stock
Which of the following statements is correct? a. The clientele effect can explain why so many firms change their dividend policies so often. b. New-stock dividend reinvestment plans are similar to stock dividends because they both increase the number of shares outstanding but dont change the firms total amount of book equity. c. One advantage of adopting the residual dividend policy is that this policy makes it easier for corporations to develop a specific and well-identified dividend clientele. d. If a firm follows the residual dividend policy, then a sudden increase in the number of profitable projects is likely to reduce the firms dividend payout.
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