Examlex
If a firm uses the residual dividend model to set dividend policy,then dividends are determined as a residual after providing for the equity required to fund the capital budget.Under this model,the better the firm's investment opportunities,the lower its payout ratio will be,other things held constant.
Corporate Tax Rate
The tax imposed on the net income of a corporation, with rates varying by country and sometimes also by the level of income.
Leverage
Leverage refers to the use of borrowing (debt in capital structure) to amplify potential returns from an investment or project.
Personal Tax Rate
The percentage at which an individual's income is taxed by the government, varying by income level and jurisdiction.
Miller Model
A theory on capital structure that extends the Modigliani-Miller theorem by including corporate taxes but excluding bankruptcy costs.
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