The idea that there are different preferences for receiving dividend income as a result of investors having different tax situations is best described as tax brackets.

Question

Quizplus · Accepted Answer

This idea is best described as the "dividend preference theory" or "clientele effect," which suggests that investors prefer dividends or capital gains based on their specific tax situations, not "tax brackets," which refer to the rates at which income is taxed at different levels of income.

The Idea That There Are Different Preferences for Receiving Dividend