If a firm adheres strictly to the residual dividend policy, then if its optimal capital budget requires the use of all earnings for a given year (along with new debt according to the optimal debt/total assets ratio), then the firm should pay
A. no dividends to common stockholders.
B. dividends only out of funds raised by the sale of new common stock.
C. dividends only out of funds raised by borrowing money (i.e., issue debt).
D. dividends only out of funds raised by selling off fixed assets.
E. no dividends except out of past retained earnings.
Answer: A
You might also like to view...
Knowledge management tools build _____ and help employees access them.
Fill in the blank(s) with the appropriate word(s).
Which of the following parameters shapes our understanding of relationship negotiation strategy and tactics?
A. Negotiating within relationships takes place at a single point in time. B. Parties never make concessions on substantive issues. C. Negotiating within relationships may never end. D. Negotiation in relationships is only about the issue.
Treasury stock is stock that has been authorized, issued, and is outstanding.
Answer the following statement true (T) or false (F)
Which of the following is NOT an example of a non-equity alliance:
a. Joint venture b. Long-term supply relationship c. Licensing arrangement d. Distribution agreement