The theory that argues that dividends that the firm has committed to pay are less risky to risk-averse investors than are potential future capital gains is referred to as:

Question

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The bird-in-the-hand theory suggests that dividends in hand are considered less risky by investors than potential future capital gains, as it emphasizes the certainty of dividend payments over the uncertainty of capital gains.

The Theory That Argues That Dividends That the Firm Has