Positive NPV Projects Enhance Shareholder Wealth

question 11

Essay

Positive NPV projects enhance shareholder wealth. However, in some cases the payment of dividends limits the number of positive NPV projects a firm can take. Why, then, shouldn't shareholders prefer a residual dividend policy?

---

Definitions:

Government Regulators

Authorities or agencies that enforce laws, guidelines, and standards across various sectors to protect public interest.

Codes Of Conduct

Formalized rules and guidelines that describe ethical standards and expected behaviors for organizations or professions.

Ethical And Socially Responsible

Adhering to moral principles and considering the impact on society and the environment in decision-making processes.

Corporate Codes Of Ethics

A set of principles designed to guide decision-making by members of an organization and to handle their business ethically.