According to the Residual Theory of Dividends

question 19

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 preference share dividends should be paid to ordinary shareholders.
• C)dividend payments are a constant percentage of EPS.
• D)a dividend is the residual above the payout ratio.

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