A company's dividend policy can also be affected by factors internal to the organization and by the external (macroeconomic) environment in which the business operates. In the table that follows, identify which factors, in general, tend to favor high or low dividend payout ratios. Factor Taxes on capital gains are deferred until the capital gain is realized, but taxes on dividend income are due in the year in which the dividends are received. A firm has limited investment opportunities. A closely held firm has a majority of its shareholders in high marginal tax brackets. Favors a High Payout Favors a Low Payout O Having the ability to accelerate or delay projects makes it for a firm to adhere to a stable dividend policy. If management is concerned with keeping control of the company, it will be likely to retain control by issuing new stock to raise capital. earnings than it otherwise would to avoid diluting