Which of the following would cause dividends to increase if the firm was using the residual dividend model?

Question

Quizplus · Accepted Answer

Under the residual dividend model, dividends are paid from the residual or leftover equity after all positive NPV projects are funded. If there are fewer projects (A), more debt is used (B), or net income increases (C), more residual funds are available for dividends, thus all options would lead to an increase in dividends.

Which of the Following Would Cause Dividends to Increase If