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A Company That Only Pays Dividends When It Has Exhausted

Question 73

Multiple Choice

A company that only pays dividends when it has exhausted all value-enhancing projects is consistent with the:


A) residual explanation of dividend policy.
B) signaling explanation of dividend policy.
C) agency cost explanation of dividend policy.
D) bird-in-the-hand explanation of dividend policy.

Correct Answer:

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