Suppose two equally risky shares, Div and Cap, offer the same expected return before tax. Div shares pay a generous dividend but offer low expected capital gains. Cap shares pay low dividends but offer high expected capital gains. Which one of the two shares would a pension fund prefer? An individual? A corporation? Explain your answers.

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The Answer of Suppose two equally risky shares, Div and Cap, offer the same expected return before tax. Div shares pay a generous dividend but offer low expected capital gains. Cap shares pay low dividends but offer high expected capital gains. Which one of the two shares would a pension fund prefer? An individual? A corporation? Explain your answers.

Suppose Two Equally Risky Shares, Div and Cap, Offer the Same