In a frictionless world, there be differences in valuation between dividend paying and nonpaying firms holding all else constant. In a world with adjustment periods, there be excess demand for payers or non-payers leading to differences in valuation. If investors value firms more highly with higher growth rates (holding all else constant); we would expect to see a premium on while if taxes decrease, we would expect to see an increase in relative valuation for should not; might; dividend payers; non-payers should not; might; non-payers; non-payers should not; might; non-payers; dividend payers should; might not; dividend payers; non-payers