Ernesto wants some advice. He heard that some companies pay out a large portion of their earnings

Question:

Ernesto wants some advice. He heard that some companies pay out a large portion of their earnings as dividends to stockholders. Other companies pay few or no dividends. A friend told him that dividends affect the value of stock and that he should invest in that pay high rates. What advice would you give Ernesto about this matter?

Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...