Chicago Corporate Governance Observers (CCGO) is a consulting firm that provides corporate training in corporate governance matters. In particular, CCGO has been hired by the Securities and Exchange Commission in order to prepare to prepare learning material for a two-week training program on dividend matters. In order to finish the learning material properly, the CEO of CCGO has resorted to your expertise to answer key questions.

2b. What type of economic reality makes the use of dividends most appealing? Please explain.