Question: Assuming that the markets are in equilibrium, Goodwin s current expected dividend yield is , and Goodwin s capital gains yield is . Goodwin has
Assuming that the markets are in equilibrium, Goodwins current expected dividend yield is and Goodwins capital gains yield is
Goodwin has been very successful, but it hasnt paid a dividend yet. It circulates a report to its key investors containing the following statement:
Investors prefer the deferred tax liability that capital gains offer over dividends.
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