... Costs and the Clientele Effect of Dividends,” The Journal of Financial Economics, December 1977, 419–436.Clientele EffectThe tendency of a firm to attract aset of investors who like itsdividend ... income would be disadvantaged. The value of their stock might increase, but they would be forced to go to the trouble andexpense of selling off some of their shares to obtain cash. Also, some ... we must be able to measure with ahigh degree of accuracy each firm’s cost of equity. Neither of these two condi-tions holds: We cannot find a set of publicly owned firms that differ only in theirdividend...