Question: The question as to whether dividend policy has an effect on share prices raises a question as to whether dividends paid out to stockholders are

The question as to whether policy has an effect on share prices raises a question as to whether dividends paid out to stockholders are any more “ certain” than the expected future dividends the stockholders hope to receive from the retention of firm earnings. This is known as the “bird- in- the- hand’ theory of policy. Do you agree with this theory? Explain.

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