Investors tend to buy shares with low payout ratios and dividend yields if they are looking for more capital appreciation from the shares.

Question

Quizplus · Accepted Answer

Investors seeking capital appreciation typically prefer companies that reinvest their earnings into the business rather than paying them out as dividends, which is characteristic of companies with low payout ratios and dividend yields. These reinvestments often aim for growth, potentially leading to higher future stock prices.

Investors Tend to Buy Shares with Low Payout Ratios and Dividend