Under dividend aversion investors prefer future capital gains to current dividends because of lower tax rates.

Name: Under dividend aversion investors prefer future capital gains to current dividends because of lower tax rates.
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Question

Quizplus · Accepted Answer

Under dividend aversion, investors prefer future capital gains over current dividends because capital gains are taxed at lower rates compared to dividends. This is because of the way the tax code is structured. Hence, statement A is true.

Under Dividend Aversion Investors Prefer Future Capital Gains to Current