briefly discuss some real world factors that may support the payment of high and low dividends

Expert Solution

Dividends are monies that are paid out regularly to stockholders of a company out of the company's profits. In this lesson, we will talk about low dividend payouts and how both companies and investors can benefit from this. A low dividend payout is when a company keeps the majority of its profits and reinvests it in the business and then gives out the rest as dividends. For example, if a company reinvests 60% of its profits back into the business and then pays out the rest in dividends, it has a dividend payout of 40%. If the company only keeps 10% of the profits and pays out the rest, then this company has a payout of 90%, which is high.

While some companies will pay out the majority of its profits as dividends, others choose to keep most of the profits and pay out a small portion of its profits as dividends. Also, some investors even look specifically for companies that have a low dividend payout. Let's talk about why this is so.

jeff jeffy answered 1 year ago

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