According to the Residual Theory of Dividends

question 67

Multiple Choice

According to the residual theory of dividends

• A) dividends are to be paid out only after investment financing needs have been met.
• B) earnings remaining after payment of preferred stock dividends should be paid to common stockholders.
• C) dividend payments are a constant percentage of EPS.
• D) a dividend is the residual above the payout ratio.