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Residual Dividend Approach
Policy where a firm pays dividends only after meeting its investment needs while maintaining a desired debt–equity ratio.
Debt-Equity Ratio
A financial metric showing the mix of debt and equity used by a company to support its assets.
Investment Needs
The required capital an individual or organization needs to achieve financial goals.
Low-Dividend Clientele
Investors who prefer companies that offer lower dividend payments because they are in lower income tax brackets or have different investment goals.
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