Question

Which of the following investors would likely prefer a stock dividend over a cash dividend?

• Bayne wants to delay paying taxes on his investments for as long as possible. 
• Jaden values having a regular stream of income from his investments. 
• Catrina is risk-averse and doesn't like to count on capital gains. 
• Aila prioritizes short-term outcomes over long-term ones in her investing choices.

Answer 1

Solution:
	Answer is 1st option "Bayne wants to delay paying taxes on his investments for as long as possible"
Working Notes:
	under stock dividend, shares are issued as dividend , means existing shareholders get additional shares, and which does not result to cash in hand , so shares gain or capital gain will be taxed in the year it will be sold.
	So , Bayne will able delay paying taxes on his investments for as long as possible by simply delaying sale of the shares . As he will be taxed in the year in which he will sale his shares which were received under stock dividend.
	Jaden want regular stream of income , so his need cash dividend is good so he will not prefer stock dividend.
	Catrina risk-averse and does not like count on capital gains means, getting shares under stock dividend and shares prices get fluctuate more which risk averse does not like. So he will better go for cash dividend as cash dividend received it does not change so, cash dividend is better for Catrina . And in cash dividend there is no question capital gains as there in no shares received under stock dividend.
	As Aila prioritizes short-term outcomes over long term ones in her investing choices, stock dividend generate long term gains as an when Aila will sales the shares received under stock dividend, cash dividend in a short-term thing , Hence, Alia will not prefer stock dividend over a cash dividend.
Please feel free to ask if anything about above solution in comment section of the question.