Suppose Two Equally Risky Shares,Div and Cap,offer the Same Expected

question 68

Essay

Suppose two equally risky shares,Div and Cap,offer the same expected return before tax.Div shares pay a generous dividend but offer low expected capital gains.Cap shares pay low dividends but offer high expected capital gains.Which of the two shares would a pension fund prefer? An individual? A corporation? Explain your answers.

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Definitions:

Land

A property or parcel of the earth's surface, including resources and physical environment, which can be owned or leased.

EIS

Environmental Impact Statement, a document required for major federal actions in the United States, outlining the effects on the environment of proposed projects.

Psychological Effects

The impacts or changes in an individual's mental state, emotions, or behavior as a result of an experience, condition, or external stimulus.

Urban Environment

A geographical area characterized by high human population density and vast human-built features in comparison to areas surrounding it.