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
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.