Capital gains may be preferred by investors over dividends even if their tax rates are equal because:

Question

Quizplus · Accepted Answer

Taxes on capital gains can be timed, meaning investors have some control over when they realize the gains and pay the taxes. This allows for potential tax savings by strategically timing the sale of investments. Dividends, on the other hand, are distributed regularly and taxes are withheld at the time of distribution, giving investors less control and potential for tax planning.

Capital Gains May Be Preferred by Investors Over Dividends Even