As per dividend relevance theory, current dividend payments are believed to reduce investor's uncertainty, thereby-all else being equal-placing a lower value on a firm's stock after its payment.

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Dividend relevance theory, as proposed by Gordon and Lintner, suggests that investors value dividends and that higher dividends can lead to a higher stock price because they reduce uncertainty about the company's financial health.

As Per Dividend Relevance Theory, Current Dividend Payments Are Believed