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.

Name: 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.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

An investor would likely prefer the firm to reinvest earnings into positive NPV projects, as these projects can potentially generate higher returns than the dividends.

All Else the Same, an Investor Is Likely to Prefer