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All else the same, a low dividend payout is likely to be preferred by a firm's investor: If flotation costs are significant. If marginal corporate

All else the same, a low dividend payout is likely to be preferred by a firm's investor:

  • If flotation costs are significant.

  • If marginal corporate tax rates exceed marginal personal tax rates.

  • If the investor has a need for current income.

  • If the investor is tax-exempt.

  • If the firm doesn't have any positive NPV projects in which it could invest.

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