clientele effect

(noun)

The theory that changes in a firm's dividend policy will cause loss of some clientele who will choose to sell their stock, and attract new clientele who will buy stock based on dividend preferences.

Related Terms

  • dividend clientele
  • clientele

Examples of clientele effect in the following topics:

  • Impact of Dividend Policy on Clientele

    • The clientele effect is the idea that the type of investors attracted to a particular kind of security will affect the price of the security when policies or circumstances change.
    • These changes in demographics related to a stock's ownership due to a change of dividend policy are examples of the "clientele effect. "
    • The clientele effect's real world implication is that what matters is not the content of the dividend policy, but rather the stability of the policy.
    • Although commonly used in reference to dividend or coupon (interest) rates, the clientele effect can also be used in the context of leverage (debt levels), changes in line of business, taxes, and other management decisions.
    • Therefore, if a company discontinued paying dividends, the clientele effect may cause retiree shareholders to sell the stock in favor of other income generating investments.
  • Expected Dividends, No Growth

    • This suggests that a particular pattern of dividend payments may suit one type of stock holder more than another; this is sometimes called the "clientele effect. " A retiree may prefer to invest in a firm that provides a consistently high dividend yield, whereas a person with a high income from employment may prefer to avoid dividends due to their high marginal tax rate on income.
    • If clienteles exist for particular patterns of dividend payments, a firm may be able to maximize its stock price and minimize its cost of capital by catering to a particular clientele.
  • Value of a Low Dividend

    • According to the clientele effect, firms offering low dividend payout will attract certain investors who are looking for a long term investment and would like to avoid taxes.
  • Point-of-Purchase Promotions

    • Point of purchase promotions offer marketers one of the most effective sales promotion tools included in the "promotional mix."
    • Failure to understand the store's clientele and their true needs -- Your product may have a multitude of benefits, but if the customers don't need those particular benefits they won't buy your product.
  • Prohibition

    • Constitution banning alcohol was implemented through the Volstead Act, which went into effect on January 17, 1920.
    • Illicit alcoholic beverage industries earned an average of $3 billion per year in illegal income, none of which was taxed, and effectively transformed cities into battlegrounds between opposing bootlegging gangs.
    • Prohibition had a large effect on music in the United States, specifically Jazz.
    • This new norm established women as a notable new target demographic for alcohol marketers, who sought to expand their clientele.
  • Conclusion: Cultural Change in the Interwar Period

    • Constitution banning alcohol was implemented through the Volstead Act, which went into effect on January 17, 1920.
    • Both material and psychological effects reverberated across the nation.
    • In 1930, a confluence of bad weather and poor agricultural practices compounded the Depression's effects on farmers in areas that included 1 million acres in the South and Midwest Great Plains that came to be known as the Dust Bowl.
    • Prohibition had a large effect on music in the United States, specifically Jazz.
    • The Cotton Club featured black performers and catered to a white clientele, while the Savoy Ballroom catered to a mostly black clientele.
  • One of three strategic functions

    • One part of its financial strategy is securing sufficient amounts of capital to help the start-up airline establish reliable service and gain a loyal clientele.
  • Flappers

    • The Cotton Club featured black performers and catered to a white clientele, while the Savoy Ballroom catered to a mostly black clientele.
  • O Tannenbaum and Schmidt

    • Since opening five years ago, the business has overcome the challenge of establishing itself and has built a solid clientele.
  • The Social Gospel

    • The Society for Ethical Culture was established in New York in 1876 by Felix Adler attracted a Reform Jewish clientele.
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