Which of the following statements would be consistent with thebird-in-the-hand d

Question

Which of the following statements would be consistent with thebird-in-the-hand dividend theory? a. Investors are indifferent whether stock returns comefrom dividend income or capital gains income. b. Dividends are more certain than capital gains income. c. Wealthy investors prefer corporations to defer dividendpayments because capital gains produce greater after-taxincome. d. Dividends are less certain than capital gains. e. None of the above. Which of the following statements would be consistent with thebird-in-the-hand dividend theory? a. Investors are indifferent whether stock returns comefrom dividend income or capital gains income. b. Dividends are more certain than capital gains income. c. Wealthy investors prefer corporations to defer dividendpayments because capital gains produce greater after-taxincome. d. Dividends are less certain than capital gains. e. None of the above.

Explanation / Answer

a. Investors are indifferent whether stock returns comefrom dividend income or capital gains income. b. Dividends are more certain than capital gainsincome. c. Wealthy investors prefer corporations to defer dividendpayments because capital gains produce greater after-taxincome. d. Dividends are less certain than capital gains. e. None of the above.

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