Question

The common stock of Dayton Dry Goods has historically had a low dividend yield that is expected to continue. As a result, the majority of its shareholders are individuals who prefer capital gains over cash dividends for tax reasons. The fact that most of these shareholders have similar characteristics is referred to by which one of the following terms?
A. Market reaction effect
B. Clientele effect
C. Distribution effect
D. Investor effect Information content effect

Answer 1

Answer: clientele effect

Explanation:

When stock prices moves up according to the investors goals and demands it is known as the Clientele effect. They are affected through tax, or other policies and this would affect the shares casuing the stock price to move either up or down.