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Dollar of dividends and a dollar of capital gains

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Reference no: EM131624427

Payout Policy - Respond to the following two statements:

A) MM say that investors are equally happy with a dollar of dividends and a dollar of capital gains. That's Crazy. Everyone knows that dividends are stable and capital gains risky. I'll take the dividend any day.

B) Safer companies tend to pay more generous dividends. Therefore a company can reduce the risk of its shares by increasing dividend payout.

Reference no: EM131624427

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