Regarding the clientele effect of dividend policy

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Reference no: EM13976201

Which of the following statements regarding the “clientele effect” of dividend policy is INCORRECT?

A. Firm’s past dividend policy determines its current clientele of investors.

B. Clientele effects impede changing dividend policy. Taxes and brokerage costs hurt investors who have to switch companies.

C. Different groups of investors, or clienteles, prefer different dividend policies.

D. If mangers believe in “clientele effect”, they should change their dividend policies on a regular basis to attract different clienteles.

Reference no: EM13976201

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