Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Basic Question 0 of 2
The tax-preference theory of dividends would suggest that investors (assume capital gains tax rate is lower than dividend income tax rate)
B. prefer that firms retain and reinvest earnings.
C. are indifferent between dividend payment and earnings retention.
A. prefer that firms pay dividends.
B. prefer that firms retain and reinvest earnings.
C. are indifferent between dividend payment and earnings retention.
User Contributed Comments 2
| User | Comment |
|---|---|
| katybo | tax-averse theory? |
| thebkr777 | The answer give it to us... |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
describe types of information (signals) that dividend initiations, increases, decreases, and omissions may convey;
explain how agency costs may affect a company's payout policy;
CFA® 2026 Level II Curriculum, Volume 3, Module 16.