An investor in a relatively high personal income tax bracket would likely prefer a firm with a high dividend payout rate.

Name: An investor in a relatively high personal income tax bracket would likely prefer a firm with a high dividend payout rate.
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Question

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Investors in high personal income tax brackets often prefer firms with lower dividend payout rates to avoid the immediate tax liability on dividends, favoring capital gains which are taxed at a potentially lower rate and only upon sale of the stock.

An Investor in a Relatively High Personal Income Tax Bracket