Investor aversion to the payment of dividends originates principally from:

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Investor aversion to the payment of dividends originates principally from the fact that capital gains receive favorable tax treatment, as opposed to dividends which are taxed at a higher rate. This is known as the dividend tax penalty. Therefore, investors may prefer companies that prioritize share buybacks or reinvesting profits in the company, rather than paying out dividends. The belief that "a bird in hand is worth two in the bush" may also play a role, but it is not the primary reason for investor aversion to dividends.

Investor Aversion to the Payment of Dividends Originates Principally From