The residual theory of dividends suggests that dividends are_________to the value of the firm.
A) integral
B) irrelevant
C) relevant
D) residual

Question

The residual theory of dividends suggests that dividends are_________to the value of the firm. 
A) integral
B) irrelevant
C) relevant
D) residual

Quizplus · Accepted Answer

The residual theory of dividends suggests that dividends are irrelevant to the value of the firm. This is because dividends are simply a distribution of profits to shareholders, and do not affect the underlying value of the firm's assets or its ability to generate future profits.

The Residual Theory of Dividends Suggests That Dividends Are_________to the Value