Quiz Ch 14 – T/F Residual Dividend Model’s Influence on Payout Ratios and Investment Opportunities

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition

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True or false: Using the residual dividend model for dividend policy means dividends are what's left after funding the capital budget with required equity. In this model, if all else remains constant, a company with better investment opportunities will have a lower payout ratio.

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