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    A gentleman owns Company X stock: What preferences are these two investors demonstrating? What argument should the man use to convince this lady that Company X stock is the stock for her?

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    A gentleman owns Company X stock because its price has been steadily rising over the past few years and he expects its performance to continue. He is trying to convince this lady to purchase some Company X stock, but she is reluctant because Company X has never paid a dividend. She depends on steady dividends to provide her with income.

    a. What preferences are these two investors demonstrating?

    b. What argument should the man use to convince this lady that Company X stock is the stock for her?

    c. Why might his argument not convince her?

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    Solution Preview

    a. The preference for the gentleman is the appreciation of his investment where as the preference for the lady is a regular source of income in form of dividends.

    b. He can convince the lady by ...

    Solution Summary

    Discusses stock investment problems.

    $2.19

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