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:

Causal Attribution

The process of assigning causes or reasons to behaviors and events, explaining why things happen or why certain actions were taken.

Covariation Model

A psychological theory proposing that people determine the cause of an event based on the pattern of covariation between the event and the potential causes across time and circumstances.

Discreteness

Pertains to the characteristic of being separate and distinct in nature, often referring to the classification of data or phenomena into distinct categories.

External Attribution

The process of inferring that a person's behavior is due to situational factors, rather than their own personal characteristics.