Which of the Following Shareholders Tend to Favor a High

question 38

Multiple Choice

Which of the following shareholders tend to favor a high dividend policy?
I.retired individuals
II.endowment funds
III.corporate investors
IV.investors with high dividend tax rates but low capital gains tax rates

• A)I and III only
• B)II and IV only
• C)I, II, and III only
• D)II, III, and IV only
• E)I, II, III, and IV

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Definitions:

Market Values

The current prices at which assets, securities, commodities, or services can be bought or sold in a marketplace, emphasizing the plural to encompass a range of values across various markets.

WACC

Weighted Average Cost of Capital; a calculated average of the cost of equity and the cost of debt that a company uses to finance its operations, weighted based on the proportion of each finance source in the company's capital structure.

Capital Structure

Capital structure is the mixture of debt and equity that a company uses to finance its operations and growth.

Coupon Rate

The yearly percentage yield from a bond, measured against its nominal value.