According to behavioral finance investors prefer dividends because:

Question

Quizplus · Accepted Answer

Behavioral finance research suggests that investors prefer dividends because they view them as a form of self-discipline, where they are forced to spend only the dividends and not the principal. This helps to avoid impulsive spending or selling of investments. Tax considerations may also play a role, but this is not as significant as the behavioral factor of self-discipline. The efficiency of the stock market is not directly relevant to the preference for dividends.

According to Behavioral Finance Investors Prefer Dividends Because