In a frictionless world, there should not be differences in valuation between dividend-paying and non-paying firms holding all else constant. In a world with adjustment periods, there might 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 _________.

(a) non-payers; non-payers

(b) dividend payers; non-payers

(d) non-payers; dividend payers