An investor is more likely to prefer a high dividend payout if a ﬁrm:

Question

Quizplus · Accepted Answer

If a firm has few, if any, positive net present value projects, it may be seen as less likely to generate future growth and therefore, investors may prefer a high dividend payout as a way to receive a return on their investment. This is because dividend payments provide immediate returns, while waiting for capital gains may take more time and involve more risk.

An Investor Is More Likely to Prefer a High Dividend