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2. As an investor, would you prefer a cash or stock dividend? Why?


How would the price of a stock be affected by its dividend?

I'd prefer the stock dividend because I don't have to pay tax on it until I sell the stock. The price of the stock will drop inversely to the amount of the stock dividend. For example, if a $25 stock pays a 25% stock dividend (also known as a 5-for-4 split), the price will drop to $20 when the dividend is paid. This keeps your total value the same. (Before the dividend you had 400 shares at $25 - $10000 total - and after the dividend you have 500 shares at $20 - also $10000.)

buy land...any investment that involves cyberspace is unstable !!!

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