Growth ﬁrms which are more concerned about the ﬁrm's rate of growth than they are about maintaining constant dividends will adopt a (n) _____ dividend policy.

Question

Quizplus · Accepted Answer

Growth firms that are more concerned about their rate of growth will adopt a residual dividend policy. This is because they prioritize reinvesting profits back into the business to fuel growth instead of paying out constant dividends. A residual policy involves paying out dividends only after all profitable investment opportunities have been exhausted.

Growth ﬁRms Which Are More Concerned About the ﬁRm's Rate