Ar per bird in hand theory high dividend payout is ______ to low pay out
A) preferred
B) not preferred
C) irrelevant for investors
D) none of above
Answers
The correct answer is option (A) preferred.
Detailed explanation about Bird in Hand theory:
The Bird in Hand theory is proposed by Myron Gordon and John Lintner, according to which the investors prefer a high dividend payout, as they think that the dividends are risk less and the capital gains are risky.
The theory is also called 'dividend preference' theory.
Answer B is correct.
As per a bird in the hand theory dividend payout is not preferred to low payout.
The dividend payout proportion is the measure of dividends paid to investors in respect to the ratio of aggregate overall gain of an organization.
The organization for development holds the sum that isn't paid out in dividends to investors.
The sum that is stayed with by the is called held profit.