The Residual Theory of Dividend Policy Asserts That

The residual theory of dividend policy asserts that:

A) sufficient dividends are paid to maintain a stable total dividend payment with any residual invested internally by the firm.
B) sufficient dividends are paid to maintain a stable dividend payout ratio with any residual invested internally by the firm.
C) dividends are paid out of the residual remaining after internal investments by the firm.
D) dividend payments are adjusted to maintain dividends at a constant percentage of total cash flows.