Definition for : Volatility - dividends

A high Payout ratio implies low price Volatility, all other things being equal. A low Payout ratio will result in capital gains, which will be realised by selling the Shares. At the same time, the Share price of a company that pays out all its Earnings in dividends will behave much like the price of a Bond.
(See Chapter 38 Share issues of the Vernimmen)
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