One position expressed in the financial literature is that firms set their dividends as a residual after using income to support new investments. Explain what a residual policy implies, illustrating your answer with a table showing how different investment opportunities could lead to different dividend payout ratios.
What is the difference between a stock dividend and a stock split? As a stockholder, would you prefer to see your company declare a 100% stock dividend or a 2-for-1 split? Assume that either action is feasible. One position expressed in the financial literature is that firms set their dividends as a residual after using […]