The Dividend Yield Effect May Be Explained by the Fact

The dividend yield effect may be explained by the fact that:

A) if dividends are taxed more heavily than capital gains,investors will prefer a dollar of before-tax capital gains to a dollar of before-tax dividends.
B) if dividends are taxed more heavily than capital gains,investors will prefer a dollar of before-tax dividends to a dollar of before-tax capital gains.
C) investors will require high before-tax returns on shares that pay low dividends in order to compensate them for the higher tax burden that the capital gains will impose.
D) none of the given options.

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