Why do low dividends equate to a high persistence factor?
The company is investing more in profitable projects which in turn results in higher ROE and it takes longer for the ROE to drop to required return on equity.
Hope I am right
High persistence = a good thing that will last longer. A company with low dividends, means that it is retaining more of its earnings into retained earnings and saving it to invest in profitable projects. High dividends, means it is paying out its earnings and not saving more for later.
Thats how i remember it.