QUESTION IMAGE
Question
which of the following investors would likely prefer a stock dividend over a cash dividend?
jaden values having a regular stream of income from his investments.
catrina is risk-averse and doesnt like to count on capital gains.
bayne wants to delay paying taxes on his investments for as long as possible.
aila prioritizes short-term outcomes over long-term ones in her investing choices.
Brief Explanations
- Jaden wants regular income, which cash dividends provide, so he prefers cash, not stock.
- Catrina is risk - averse and dislikes capital gains (stock dividends relate to capital gains potential), so she prefers cash.
- Bayne wants to delay taxes. Stock dividends are generally not taxed immediately (taxed when stock is sold), while cash dividends are taxed when received. So he would prefer stock dividends to delay tax payment.
- Aila prioritizes short - term outcomes. Cash dividends give immediate income (short - term), while stock dividends are more long - term oriented. So she prefers cash.
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Bayne wants to delay paying taxes on his investments for as long as possible.