a firm adheres strictly to the residual dividend policy, the issuance of new common stock would suggest that

Name: a firm adheres strictly to the residual dividend policy, the issuance of new common stock would suggest that
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Question

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Under a residual dividend policy, dividends are paid only after all acceptable investment opportunities are funded. If new common stock is issued, it suggests that the firm did not have enough retained earnings to cover its investments, implying no dividends were paid.

A Firm Adheres Strictly to the Residual Dividend Policy, the Issuance