Prior to the Tax Relief Act of 2003, investors in high marginal tax brackets prefer dividends while investors in low marginal tax brackets prefer to have corporate earnings reinvested.

Question

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Prior to the Tax Relief Act of 2003, investors in high marginal tax brackets preferred capital gains over dividends due to the higher tax rates on dividends, while those in lower brackets were less affected by the tax rate difference.

Prior to the Tax Relief Act of 2003, Investors in High