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

Question

Quizplus · Accepted Answer

Retired individuals and endowment funds often prefer high dividend policies for the steady income they provide. Corporate investors may also favor high dividends due to the tax benefits they can receive (in some jurisdictions, dividends received by corporations from their investments in other corporations may be eligible for tax deductions or credits). Investors with high dividend tax rates but low capital gains tax rates would generally prefer lower dividend payouts to minimize their tax liability, making IV incorrect for this context.

Which of the Following Shareholders Tend to Favor a High