Quiz Ch 17 – Investor Preference for Capital Gains vs. Dividends
Fundamentals of Corporate Finance
Brealey, Myers, and Marcus
10th Edition
Why might investors favor capital gains over dividends, even if both are taxed at the same rate?
Why might investors favor capital gains over dividends, even if both are taxed at the same rate?
Caterina Chekov, who holds 100 shares of Kappa Corp, is not in need of the extra cash resulting from the dividend increase. How can she balance the change in dividend policy?
In what situations may boards of directors encounter legal limitations when announcing dividends?
When there’s an uptick in share price following a dividend increase, what condition makes this outcome logical?
In what situation have managers been described as hesitant to raise dividends?
Which is NOT considered a market imperfection affecting the choice between dividends and repurchases?
What is the likely impact on the stock price when investors are anticipating a dividend cut, and the announced reduction matches their expectations?
According to MM’s assertion, for dividend policy to NOT influence the value of the firm, what condition must dividend policy meet in relation to specific factors?
What is MM’s proposition regarding dividends, and how does it predict shareholder behavior in relation to stock prices and dividend payouts?
When considering a fixed investment policy and capital structure, payout policy represents a balance between what two elements?