Quiz Ch 14 – T/F Residual Dividend Model’s Relation between Debt Ratio and Payout Ratio

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition

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True or false: Utilizing the residual dividend model for dividend policy entails determining dividends after assigning equity for the capital budget. In this model, assuming other factors are unchanged, a higher firm debt ratio corresponds to a lower payout ratio.

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