Respond to the following two statements: a. MM say that investors are equally happy with a dollar
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a. "MM say that investors are equally happy with a dollar of dividends and a dollar of capital gains. That's crazy. Everyone knows that dividends are stable and capital gains risky. I'll take the dividend any day."
b. "Safer companies tend to pay more generous dividends. Therefore a company can reduce the risk of its shares by increasing dividend payout."
Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
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