Question: David owns Dapsa stock because its price has been steadily rising over the past few years and he expects this performance to continue. David is

  1. David owns Dapsa stock because its price has been steadily rising over the past few years and he expects this performance to continue. David is trying to convince Jones to purchase some Dapsa stock, but he is reluctant because Dapsa has never paid a dividend. He depends on steady dividends to provide him with income.

  1. What preferences are these two investors demonstrating?

  1. What argument should David use to convince Jones that Dapsa stock is the stock for him?

  1. Why might David's argument not convince Jones?

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