![]() ![]() Dividend Irrelevance Theory Versus Bird In Handīird in hand is the counterargument to the Modigliani Miller dividend irrelevance theory. ![]() Next, let’s compare and contrast bird in hand with 2 other popular dividend theories. That being the case, I suggest that bird in hand theory is important to you. It is part of your investment philosophy or will be. And decide whether or not to move forward.Īs a current or future dividend investor, whether you realize it or not, you are a believer and follower of bird in hand theory. And are trying to understand dividends and dividend stock investing. Or, you are interested in getting started dividend investing. Specifically, you are a dividend investor. Since you found your way to this article, I can guess about you. Or, something potentially better than a dividend.ĭisclosure: At no cost to you, I may get commissions for purchases made through links in this post. Share price increases are the 2 birds in the bush. In contrast to the potential for large increases in the share price of a stock. How does this relate to dividends? Well, it is quite simple…Ī dividend from a high-quality dividend stock is something you can count on. By trying to get something bigger and better down the road. ![]() Versus the risk of losing whatever “it” is. The saying means that it is better to hold onto something you have now, or can count on receiving soon. It is “a bird in the hand is worth two in the bush”. This is sometimes referred to as dividend relevance theory.įurthermore, bird in hand is based on an old adage. It is based on the belief that investors place a high preference for the receipt of dividends. First of all, bird in hand is 1 of 3 dividend theories. ![]()
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