Multiple Choice
A residual dividend policy differs from a stable dividend policy in the following respect:
A) Dividends can only be stable under a residual policy if profits are constant.
B) Dividends under the residual policy method fluctuate from year to year depending on profits.
C) Dividends are a function of profits under the stable policy method but are a function of investment needs under the residual policy method.
D) Dividends are a function of long-term profits under the stable policy method but are a function of investment needs under the residual policy method.
Correct Answer:
Verified
Correct Answer:
Verified
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