a. Under what circumstances would you (as an investor) prefer to receive cash dividends rather than...
a. Under what circumstances would you (as an investor) prefer to receive cash dividends rather than stock dividends?
| If the company can reinvest its retained earnings at a higher ROI than I could earn on the money paid to me in dividends, I would prefer that the company pay a cash dividend. | |
| If I needed current income from my investment, I would want Cash dividends. |
b. Under what circumstances would you prefer stock
dividends to cash dividends?
| If I needed current income from my investment, I would want stock dividends. | |
| If the company can reinvest its retained earnings at a higher ROI than I could earn on the money paid to me in dividends. |
Homework Answers
a) If I needed current income from my investment, I would want Cash dividends.
b) If the company can reinvest its retained earnings at a higher ROI than I could earn on the money paid to me in dividends.
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