Gordon's "bird-in-the-hand" argument suggests that

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Gordon's "bird-in-the-hand" argument suggests that investors are generally risk averse and attach less risk to current dividends than to potential future capital gains. Therefore, current dividends are more valuable to shareholders than potential future dividends or capital gains. This argument supports the idea that dividends are relevant and that a firm's dividend policy can significantly affect its stock price. However, it does not necessarily suggest that a 100 percent payout policy is optimal or that the market value of the firm is unaffected by dividend policy.

Gordon's "Bird-In-The-Hand" Argument Suggests That