[Verse 1] There's a story 'bout two theories that explain what investors want When companies make profits, should they pay or should they font The money into future growth that might bring bigger gains Let's explore these dividend views and see what each explains [Chorus] Bird in hand is worth two in the bush, they say Current dividends beat future promises any day Tax preference theory looks at what you keep After Uncle Sam takes his cut so deep Bird in hand, tax in mind These are the theories you need to find [Verse 2] The bird-in-the-hand believers say uncertainty's the key A dollar paid today is worth more than two that might be Future capital gains are risky, anything could go wrong So give me cash right now, that's where my heart belongs [Chorus] Bird in hand is worth two in the bush, they say Current dividends beat future promises any day Tax preference theory looks at what you keep After Uncle Sam takes his cut so deep Bird in hand, tax in mind These are the theories you need to find [Verse 3] But tax preference theory flips the script around Says look at what the government takes from what you've found Dividends get taxed as income at a higher rate While capital gains might qualify for taxes that can wait [Bridge] Some investors want their money now, don't care about the tax Others calculate the after-tax returns and plan their tracks High tax bracket folks might prefer the gains that grow While retirees want dividends to fund their cash flow [Chorus] Bird in hand is worth two in the bush, they say Current dividends beat future promises any day Tax preference theory looks at what you keep After Uncle Sam takes his cut so deep Bird in hand, tax in mind These are the theories you need to find [Outro] So remember when you're analyzing dividend policy Consider both the certainty and tax efficiency Bird in hand and tax preference guide the way To understand what investors really want today
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