In the majority of low drop and quasi low drop (composite NPN-PNP) regulators, the pass device or the pass device driver, is a lateral PNP transistor. The lateral PNP transistor is inherently a low frequency cutoff device with a poor transient response.An external capacitor must be connected between the output and ground to provide filtering and compensation. This application note discusses the role of the output capacitor in loop stability. Guidelines for selecting an appropriate capacitor are provided.