The S-1 photocathode is a prime example of a heterogeneous composite whose optical and electronic transport properties have been measured by many researchers. It provides an excellent system for testing theories of composites which replace a heterogeneous system of individual components having different physical properties with a homogeneous one having averaged physical properties depending on those of the components, the so-called effective-medium approximation. Using a recently formulated self-consistent dynamic effective-medium approximation that reduces to the requirement that ${\ensuremath{\epsilon}}_{\mathrm{eff}}$ be chosen so that the forward scattering amplitude of the particles embedded in the medium should vanish on the average, we present a theoretical investigation of the optical, electronic-transport, and photoemission behavior of S-1 photocathodes with various microstructures.From an analysis of the relation ${\mathrm{\ensuremath{\epsilon}}}_{\mathrm{eff}}$=(${\mathrm{\ensuremath{\epsilon}}}_{1}$${)}_{\mathrm{eff}}$+i(${\mathrm{\ensuremath{\epsilon}}}_{2}$${)}_{\mathrm{eff}}$, the quality factor Q=(${\mathrm{\ensuremath{\epsilon}}}_{1}$${)}_{\mathrm{eff}}$/(${\mathrm{\ensuremath{\epsilon}}}_{2}$${)}_{\mathrm{eff}}$, and the optical-energy-loss function -Im(1/${\mathrm{\ensuremath{\epsilon}}}_{\mathrm{eff}}$), it is found that the photoelectric-quantum-yield (PQY) peak between 3800 and 4100 A\r{} is caused by a dielectric anomaly due to the collective oscillation of free electrons in isolated small Ag particles embedded in a host matrix of unitary dielectric constant. The broad peak in the PQY centered near 8000 A\r{} corresponds to a surface-mode collective oscillation of free electrons in the aggregated Ag particles, which surround the host matrix, with \ensuremath{\epsilon}=1. The minimum around 3.8 eV in PQY is due to plasmon loss. A multiple-step model of photoemission from S-1 photocathodes is constructed to calculate the PQY using only the experimentally determined energy-dependent electron mean free path and energy barriers at interfaces. This model includes multiple elastic scattering of photoexcited electrons in Ag particles, which can completely account for the magnitude of enhanced photoyields from small-metal-particle systems. With this model, calculated PQY curves for various microstructures are presented to show their effects on the photoelectric threshold and magnitude of the PQY throughout the entire optical region. This calculation yields quantitative results that fit experimental data without any adjustable factors.