Some investors prefer dividends to retained earnings (and the capital gains retained earnings bring),while others prefer retained earnings to dividends.Other things held constant,it makes sense for a company to establish its dividend policy and stick to it,and then it will attract a clientele of investors who like that policy.

Question

Quizplus · Accepted Answer

It is true that establishing a consistent dividend policy can attract investors who prefer that policy.

Some Investors Prefer Dividends to Retained Earnings (And the Capital