Dividend Policy and the Bird-in-the-Hand Theory

In corporate finance, understanding dividend policy theories is crucial for assessing how companies decide on dividend payouts and the implications for shareholders. According to the bird-in-the-hand theory, investors prefer dividends now rather than the uncertain future capital gains. This perspective suggests that companies should prioritize paying dividends rather than reinvesting all their earnings.

Given this theory, which of the following statements about dividend policy is consistent with the bird-in-the-hand theory?