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Clientele effect

• The grouping of investors who have a preference that the firm follows a particular financing policy, such as the amount of leverage it uses.

• The argument that a firm attracts shareholders whose preferences with respect to the payment and stability of dividends correspond to the payment pattern and stability of the firm itself.

 
 Embedded terms in definition
 Dividends
Firm
Leverage
Shareholders
 
 Related Terms
 

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