Low dividends may increase stock value due to the advantage of tax deferral that comes with capital gains.

Name: Low dividends may increase stock value due to the advantage of tax deferral that comes with capital gains.
Brand: Quizplus
Rating: 4.9 (43 reviews)

Question

Quizplus · Accepted Answer

Low dividends can lead to higher capital gains, which are taxed at a lower rate and can be deferred until the realization of the investment. This tax advantage can increase the demand for the stock, leading to a higher price and potentially increasing its overall value.

Low Dividends May Increase Stock Value Due to the Advantage