Shareholders Are More Apt to Prefer a High Dividend Payout

question 39

Multiple Choice

Shareholders are more apt to prefer a high dividend payout if a firm

• A)has high flotation costs.
• B)has a high rate of growth which requires additional funding.
• C)offers high capital gains that are taxed at a favorable rate.
• D)has lower tax rates than the shareholder.
• E)will spend the funds on a high-premium acquisition if the dividend is not paid.

---

Definitions:

Identification

A psychological process whereby an individual associates themselves closely with another person, adopting their characteristics or viewpoints.

Interview

An interview is a formal conversation where questions are asked and answers are given, typically used for the purposes of assessment, research, or information gathering.

Secondary Gain

The advantage or benefit a person unconsciously gains from maintaining a psychosomatic illness or undesirable behavior.

Delayed Gratification

The ability to resist the temptation for an immediate reward and wait for a later reward, often perceived as more beneficial.