Which of the following statements about residual income is not accurate?

Question

Quizplus · Accepted Answer

Residual income is not typically paid out as a cash dividend to both common and preferred stockholders. Instead, it refers to the net income generated by a company after accounting for all costs and expenses, including the cost of capital. It can be reinvested in the firm or paid out as dividends, but the statement about being paid to both common and preferred stockholders as a cash dividend is not accurate.

Which of the Following Statements About Residual Income Is Not