A residual dividend policy differs from a stable dividend policy in the following respect:
A)Dividends can only be stable under a residual policy if profits are constant.
B)Dividends under the residual policy method fluctuate from year to year depending on profits.
C)Dividends are a function of profits under the stable policy method but are a function of investment needs under the residual policy method.
D)Dividends are a function of long-term profits under the stable policy method but are a function of investment needs under the residual policy method.

Question

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The Answer of A residual dividend policy differs from a stable dividend policy in the following respect:
A)Dividends can only be stable under a residual policy if profits are constant.
B)Dividends under the residual policy method fluctuate from year to year depending on profits.
C)Dividends are a function of profits under the stable policy method but are a function of investment needs under the residual policy method.
D)Dividends are a function of long-term profits under the stable policy method but are a function of investment needs under the residual policy method.

A Residual Dividend Policy Differs from a Stable Dividend Policy