Asked by
Rohan Nandwani
on Nov 07, 2024
Verified
Growth firms which are more concerned about the firm's rate of growth than they are about maintaining constant dividends will adopt a (n) _____ dividend policy.
A) Special.
B) Liquidating.
C) Annual.
D) Residual.
E) Extra.
Residual Dividend Policy
A residual dividend policy involves a company paying out dividends from the leftover net income after all operational and project financing needs are met.
Rate of Growth
The pace at which a company, economy, or investment increases in size or value over a specific period.
Constant Dividends
A fixed amount of dividend that a company pays out to its shareholders regularly, typically annually.
- Recognize and elucidate the importance of the target payout ratio within the context of dividend policy.
- Elucidate the methods by which firms determine their dividend policies in alignment with their expansion plans and the nature of their investors.
Verified Answer
PB
Learning Objectives
- Recognize and elucidate the importance of the target payout ratio within the context of dividend policy.
- Elucidate the methods by which firms determine their dividend policies in alignment with their expansion plans and the nature of their investors.