Lintner's Theorem

Lintner's Theorem is a principle in finance that suggests investors value dividends as a key factor in their investment decisions. It states that companies are likely to set and maintain stable dividend payouts to signal financial health and attract investors. This approach reflects a preference for steady income and the belief that consistent dividends indicate a company's long-term profitability and stability. Essentially, Lintner's Theorem emphasizes the importance of dividends in stock valuations and how they influence investor behavior.