Which One of the Following Would Tend to Favor a Low-Dividend

question 31

Multiple Choice

Which one of the following would tend to favor a low-dividend payout?

• A)Higher tax rates on capital gains than on dividend income
• B)High flotation cost for equity issues
• C)Endowment fund investors who cannot spend principal
• D)Investors' desire for a high-dividend yield
• E)Elimination of the tax deferral on capital gains

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Definitions:

Repetition of a Game

In game theory, it refers to playing the same strategic game multiple times, which can impact the strategies and outcomes over time.

Axelrod's Experiments

A series of computer tournaments designed by Robert Axelrod to examine strategies in the iterated prisoner's dilemma.

Prisoners' Dilemma Game

The Prisoners' Dilemma Game is a standard example of a game analyzed in game theory that shows why two rational individuals might not cooperate, even if it appears that it is in their best interest to do so.

Nash Equilibrium

A concept in game theory where no player can benefit by changing strategies if other players keep their strategies unchanged.