It is sometimes suggested that firms should follow a residual dividend policy. With such a...
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Accounting
It is sometimes suggested that firms should follow a residual dividend policy. With such a policy, the main idea is that a firm should focus on meeting its investment needs and maintaining its desired debtequity ratio. Having done so, a firm pays out any leftover, or residual, income as dividends. What do you think would be the chief drawback to a residual dividend policy?
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