All else the same, an investor is likely to prefer a firm with a high dividend payout if the firm has many positive NPV projects in which it could invest.

Question

Quizplus · Accepted Answer

Investors might prefer a firm to reinvest its earnings into positive NPV projects rather than distribute them as dividends, as reinvesting can lead to higher future growth and potentially higher stock prices.

All Else the Same, an Investor Is Likely to Prefer