Scenario of risky shares, Suppose two equally risky shares,

Scenario of risky shares

Reference no: EM1368689

Suppose two equally risky shares, Hi and Lo. Hi shares pay a generous dividend and offer low expected capital gains. Lo shares pay low dividends and offer high expected capital gains. Which of the following investors would prefer the Lo shares? Which would prefer the Hi shares? Which wouldn't care? Explain. Assume that any stock purchased will be sold after 1 year.
a. A pension fund
b. An individual
c. A corporation

Reference no: EM1368689

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