Which of the Following Is Not a Logical Justification for Dividend

question 8

Multiple Choice

Which of the following is not a logical justification for dividend preference (vs.capital gains) in the real world?

• A) Institutional restrictions involving dividends
• B) Higher share prices from higher payouts
• C) A steady source of cash without transaction costs
• D) Differing income tax rates

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Definitions:

Voluntary

Pertains to actions or decisions made by an individual or entity based on their own will without external coercion.

Knowing

Possessing knowledge, awareness, or understanding, particularly in contexts where such awareness implies responsibility or acknowledgment of facts.

Duress

The act of compelling someone to act against their will by using force, threats, or coercion, which can render a contract voidable.

Physical Compulsion

The use of physical force to make someone do something against their will.