The paper of {Miller, 1961 #41} suggested that the pre-existing clientele effect might explain firms’ dividend decisions under certain circumstances. A clientele effect means that a group or some group of investors (clienteles) might prefer to invest in some firms because firms’ dividend policy fits investors’ preferences. For example, a firm in high growth industries that pay little or no dividends might attract a clientele who is in favor of share price appreciation. Such a clientele could be a group of younger investors, who usually have a long time investment horizon and therefore prefer owning the share of a firm which reinvests its earnings for further capital growth. Alternatively, a firm that has high dividend payout level might attract …show more content…
Generally, two of the most commonly discussed clienteles are tax-minimization induced clientele and transaction costs -minimization induced clientele. As investors are interested in their after-tax returns, the different tax rates of dividends income and capital gains strongly affect investors’ preference for dividends versus capital gains. If the marginal tax rate on capital gains is lower (higher) than that on dividend income, an investor might consider capital gain (dividend income) is more beneficial. All else being equal, however, a tax-exempt investor should be indifferent of capital gains or dividends from a taxation perspective Elton and (Gruber, 1970). On the other hand, transaction costs may also affect investors’ investment preference and therefore influence firms’ dividend decisions. Note that no matter whether investors prefer high dividend or high capital gains, transaction costs on financial assets are always incurred. For example, investors who heavily rely on dividend income for liquidity needs might prefer investing in a firm that pays high and stable dividend, since such an investment can help them to avoid significant transaction costs with selling stocks for capital gains. While investors who have less consumption needs at the moment might be interested in firms’ future capital growth, and thus prefer low dividend payouts to avoid transaction costs related to reinvesting the proceeds of dividends (Bishop et al.,
Social psychology is a scientific study that studies how people think, feel, and how they behave under the influence of other people (Aronson, Wilson & Akert, 2013, p. 2). Thinking about what social influence really means, we tend to think of a person who tries to persuade another person to acting a certain way. It can be a form of peer pressure, like taking that first puff of a cigarette, or it can be conforming to popular societal views, such as obeying the law of the land. Fiction is a great way to learn about social psychological perspectives. Watching popular theatrical films is the perfect way to learn because it illustrates the application of many perceptions within the subject of social psychology.
Sociocultural psychology began with Lev Vygotsky in 1931 in dealing with how people react to their environments, pressures, and influences that surround the individual in everyday life. This is a slowly expanding approach that is working towards treating psychological diseases such as obsessive compulsive disorder, also commonly known as OCD.Social psychology focuses mainly on how people react to their surroundings and others in society. Many psychologists go about treating illnesses, such as OCD and eating disorders, by placing people into situations where they have to confront their problems. Many psychologists such as Solomon Asch and Stanley Milgram performed experiments to observe how people react to surroundings and pressures.
As people socialize, they create interactions whose products are influential to act back upon the people to determine or constrain actions. Moreover, social interactions may be likened to a theatre whereby people are the actors as the rest of the people are the audience. These other people actively observe the role-playing and respond by reacting to the performances. However, people’s behaviors tend to change when they are alone as they get rid of the roles they play in front of others.
In mid September 2005, Ashley Swenson, the chief financial officer of this large CAD/CAM equipment manufacturer must decide whether to pay out dividends to the firm¡¦s shareholders or repurchase stock. If Swenson chooses to pay out dividends, she must also decide on the magnitude of the payout. A subsidiary question is whether the firm should embark on a campaign of corporate-image advertising and change its corporate name to reflect its new outlook. The case serves a review of the many practical aspects of the dividend and share buyback decisions, including(1) signaling effects, (2) clientele effects, and (3) finance and investment implications of increasing dividend payout and share repurchase decisions.
There are many psychological factors that can influence you throughout your life. Your genetics, environment, parents, peers, and society have influenced you every day since you were born. Each person is made an individual due to the different experiences in life. Your daily life constantly bombards you with stimulus that shapes you and your personality. In this paper, I will be discussing what psychological influences have affected me. This will include my childhood and how it made effects me today, the psychological personalities I currently have, and what changes I’d like to make for the future.
In turn everything in the present and the future is judged through the stocks as they hold a high importance in industrialized economies showing the healthiness of said countries economy. As investing discourages consumer spending over all decreases, it lead...
Every action or proposal needs to balance equity and efficiency needs in order to deliver optimal dividends to its targeted audience. Given the fact that resources are relatively scarce compared to the innumerable needs, businessmen, economists, administrators among other leaders reckon that every proposals needs the equity-efficiency balance in order for set goals and objectives to be achieved. This paper seeks to describe the role of equity and efficiency trade off in proposals.
Social problem is a broad topic, there is “No conclusive idea of what constitutes a social problem.” To define a social problem, there are generally three different ideas to define a social problem, “Something that impacts a large group; Something that the people in a society collective agree it is problematic; Something that violates a moral code.” (Logan) Healthcare has been on the spot light, because of The American Health Care Act. I’d like to present health care in United States as a social problem, because it qualify the three ideas to define social problem. First of all, it impacts a large group in the society, because of its cost. According to CDC, “28.2 million people who are under age of sixty five are insured” (CDC). Second, people in a society collective
The social environment has a massive influence on the physical and mental health of individuals. Legal dictionary defines social influence as “social influence occurs when one 's emotions, opinions, or behaviors are affected by others. Social influence takes many forms and can be seen in conformity, socialization, peer pressure, obedience, leadership, persuasion, sales, and marketing”, (2016). Environmental factors such as triggers also play major roles that affect and effect on how society approaches its environment and the challenges that are faced on a daily basis. Triggers included, but not limited to, are racism, bias, gender, suggestion, religion, poverty, education, economics, technology, music, products purchased and consumed. Schroder states social sciences are “ill-equipped to tackle environmental challenges confronting society”, because theoretical approaches provide little in coherent understanding centralized focus missed the bigger
Hensel, C. R., Ezra, D., & Ilkiw, J. H. (1991). The Importance of the Asset Allocation Decision.
We start by defining both the term and the concept of social psychology. Social psychology is the study of how the conscious and unconscious mind interacts to influence our behaviors, emotions, and thought processes. The concept of social psychology allows us to understand how people react when there is an actual or implied presence of another individual and/or group. Society has a large influence over human behavior. Things such as peer pressure along with parental influences, in-group versus out-group bias, group dynamics, and the implied and/or actual presence of personal principles play a large role in how one functions in everyday life. Each of these moving factors according to Marcus Aurelius are merely stepping-stones to the path
Discuss the social psychological approach in psychology and identify the kinds of questions that social psychologists attempt to answer.
There are many things that can happen when one wants to go out shopping. Some of those things can sometimes influence the way that shopping experience goes. In this short essay, situational influences are defined and described with clear examples. Furthermore, the psychological influences that one may have are also discussed. Lastly, it is important for one to understand how these types of influences work through a personal example.
Modigliani & Miller, M&M, (1958) found that in a world without taxes, the value of the firm is not affected by its capital structure, and also that the total return to investors remains the same regardless. M&M showed the
There has been a drive towards corporate governance which has been driven by a greater need for shareholder protection. If investors feel well cushioned then there is a higher chance that t...