Question

discussion forum :-

In a few sentences 120-150 , please describe (along with a rationale) the which dividend payout policy you would prefer  if you would be an investor.

(please don't describe the meaning of   dividend payout policy I just need a exact information) , please think that you are the college student

thankyou

Answer 1

As an investor, I would be looking for higher payments of dividend because it would be helpful for me to get an uniform stream of payments from the company and it would be also meaning that I would be properly realising my profits out of the company and a higher dividend payout ratio will ensure that there are distribution of dividend to the investors, rather than the investment of money into the business.

From investors prospective, it is better to realise the gains rather than keep it reinvested into business because business are subject to market risk and they may be subjected to get eliminated if they are not manage properly, so I would always be wanting to realise the dividend in spite of an opportunity loss of gaining more in the long run, but I would rather be realising the dividend and preferring a high dividend payout ratio by the company.