According to the Residual Theory of Dividends, If a Firm's

question 80

Multiple Choice

According to the residual theory of dividends, if a firm's equity need is less than the amount of retained earnings, the firm would ________.

• A) borrow to pay the cash dividend
• B) declare a dividend equal to the remaining balance
• C) pay no cash dividends
• D) pay dividends higher than the remaining balance to gain credibility

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Definitions:

Parasympathetic Nervous System

Part of the autonomic nervous system responsible for conserving energy, promoting relaxation, and managing bodily functions when at rest.

Wernicke's Aphasia

A neurological condition characterized by significant language comprehension issues and producing meaningless speech, resulting from damage to Wernicke's area of the brain.

Temporal Lobe

A region of the cerebral cortex located beneath the lateral fissure on both cerebral hemispheres of the mammalian brain, involved in processing auditory information and encoding memory.

Limbic System

A complex system of nerves and networks in the brain, involving several areas near the edge of the cortex concerned with instinct and mood. It controls basic emotions and drives.