A Residual Dividend Is a Payment to Shareholders That

question 83

Multiple Choice

A residual dividend is a payment to shareholders that:

• A) Occurs on a regular quarterly basis and normally remains constant in amount.
• B) Is paid in addition to the normal quarterly distribution amount.
• C) Is paid only from funds remaining after all positive net present value projects have been funded.
• D) Represents the funds remaining after a partial liquidation has been used to reduce debt.
• E) Occurs based on funds generated from an unusual one-time event.

---

Definitions:

Risk

In finance, risk is the potential for financial loss or the variability in the returns of an investment.

Principal

The original amount of money loaned or invested, before any interest or profit is added.

Agent

An individual or entity authorized to act on behalf of another, often in a business transaction, representing their interests.