Question

To what extent do you agree or disagree with the following statement on a scale of 1 to 5 where 1 = strongly disagree and 5 = strongly agree. Please explain your answer.

"An investor who purchases common stock will look more favorably on a company that regularly pays dividends to its common stock shareholders."

Answer 1

Rating is 5 strongly agree

A common stockholder wants regular dividend. The returns of an investment on company shares will be measured by dividend and capital appreciation. Capital appreciation can be realised only when shares are sold hence common stockholders look for alternative regular income which is dividend from the company. A regular dividend paying stock ensures return on investment and steady income to common stockholder.

Hence the statement is strongly agree