All Else the Same, an Investor Is Likely to Prefer

question 230

Multiple Choice

All else the same, an investor is likely to prefer firms with low dividend payouts:

• A) If the firm doesn't have any positive NPV projects in which it could invest.
• B) If marginal corporate tax rates exceed marginal personal tax rates.
• C) If flotation costs are significant.
• D) If the investor has a need for current income.
• E) If the investor is tax-exempt.