If investors prefer cash dividends to the more uncertain stock price appreciation, this view is consistent with the:

Question

Quizplus · Accepted Answer

The bird-in-the-hand explanation of dividend policy suggests that investors prefer the certainty of dividend payments to the potential for higher, but uncertain, future capital gains. This theory posits that investors value dividends more than future capital gains because dividends are tangible and immediate, whereas capital gains are uncertain and depend on future market conditions.

If Investors Prefer Cash Dividends to the More Uncertain Stock