Firstly, investors love dividend paying company as dividends are proof of making profit (sometimes dividend can be paid out of past profits too) Secondly, investor cash in hand is better than potential earnings by the company by way of interest. Investor feels good to redeploy received cash (dividend) on their own Thirdly, in some countries dividend are tax free income as tax on dividends has already been paid. As average tax on dividend is lower than maximum marginal tax; for some investor it generates extra post tax income Fourthly, dividend pay out ratio of most companies dont exceed 30% of available fund for paying (surplus cash) so it is seen as best of both the world Lastly, i trust by instinct a regular dividend paying company more than not paying one in same sector of industry

Firstly, investors love dividend paying company as dividends are proof of making profit (sometimes dividend can be paid out of past profits too)

Secondly, investor cash in hand is better than potential earnings by the company by way of interest. Investor feels good to redeploy received cash (dividend) on their own

Thirdly, in some countries dividend are tax free income as tax on dividends has already been paid. As average tax on dividend is lower than maximum marginal tax; for some investor it generates extra post tax income

Fourthly, dividend pay out ratio of most companies don't exceed 30% of available fund for paying (surplus cash) so it is seen as best of both the world

Lastly, I trust by instinct a regular dividend paying company more than not paying one in same sector of industry