Investors who wish to avoid paying taxes in the present are typically ________.

Question

Quizplus · Accepted Answer

Investors who wish to avoid paying taxes in the present are typically low-dividend clientele, as they prefer to invest in companies that do not pay high dividends and instead reinvest the earnings into the business. This allows them to defer taxes until they sell their shares at a later date. High-dividend clientele, on the other hand, prefer to receive regular and high dividends, which are more heavily taxed in the present. Firms with erratic dividend policies may not be attractive to either group of investors as they may not provide a consistent stream of income or reliable tax deferral opportunities.

Investors Who Wish to Avoid Paying Taxes in the Present