The TPS742 family of devices were designed to have transient response within 5% for most applications without any output capacitor. In some cases, the transient response can be limited by the transient response of the input supply. This limitation is especially true in applications where the difference between the input and output is less than 300 mV. In this case, adding additional input capacitance improves the transient response much more than just adding additional output capacitance. With a solid input supply, adding additional output capacitance reduces undershoot and overshoot during a transient at the expense of a slightly longer V_OUT recovery time. See Figure 5-25 in the Typical Characteristics section. Because the TPS742 devices are stable without an output capacitor, many applications can allow for little or no capacitance at the LDO output. For these applications, local bypass capacitance for the device under power can be sufficient to meet the transient requirements of the application. This design reduces the total solution cost by avoiding the need to use expensive high-value capacitors at the LDO output.