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Read the following scenario and answer the question below.
Northeast of Australia and northwest of Fiji lies the isolated tropical island of Tikopia. Less than two miles in length, it supports 1200 people and has been continuously occupied for nearly 3000 years, with the population holding steady for much of that time. It has a two-month dry season every year and lies in the Pacificʹs cyclone belt, which destroys homes and gardens on an unpredictable but regular basis. Tikopia is too far away from other islands to have any regular contact; the islanders must be self-sufficient.
-One major problem Tikopians have faced and solved is how to ______________
Residual Dividend Policy
A strategy where dividends are based on earnings minus funds the firm retains to finance the equity portion of its investment and working capital requirements.
Special Dividend
A one-time distribution of earnings to shareholders, oftentimes an indication of excess cash the company wants to return.
Homemade Dividend
A concept where investors create their own dividend policy by selling a portion of their portfolio of equities instead of relying on company-issued dividends.
Liquidating Dividend
A type of dividend paid by a company that is returning a portion of the capital to its shareholders, typically during dissolution.
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