BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The proverb “A bird in the hand is worth two in the bush” is certainly one you’ve heard. This proverb literally means “A dollar today is worth more than a dollar tomorrow” in terms of money. The value of money must logically be declining over time.

Detailed explanation-2: -A bird in the hand is worth two in the bush. Definition: It’s better to have a small, secured advantage than the possibility of a bigger one. It’s better to stick with what you have than risk it for something greater.

Detailed explanation-3: -Based on the adage, “a bird in the hand is worth two in the bush, ” the bird-in-hand theory states that investors prefer the certainty of dividend payments to the possibility of substantially higher future capital gains.

Detailed explanation-4: -Example of Use: Bob: “I think I’m gonna quit my job.. another firm is going to offer me a better job..” Joe: “Are you sure? You probably shouldn’t quit unless you know you’re gonna get in for sure. A bird in the hand is worth two in the bush.”

Detailed explanation-5: -The dividend irrelevance theory maintains that investors are indifferent to whether their returns from holding a stock arise from dividend or capital gains. Under the “bird in hand” theory, stock with high dividend payouts are sought by investors and, consequently, command a higher market price.