In a World with Significant Flotation Costs, Investors Will Generally

question 33

True/False

In a world with significant flotation costs, investors will generally prefer low-dividend stocks to high-dividend stocks, all else equal.

---

Definitions:

Random Variable

A variable whose values are numerical and result from randomness.

Probability Distribution

A function in mathematics that offers the chances of various outcomes happening in an experiment.

Average Profit

The mean amount of profit earned, calculated by dividing the total profit by the number of units sold or the period over which the profit was earned.

Weight Gain

An increase in body weight, which can be due to muscle mass increase, fat accumulation, or other factors.