According to the residual dividend payout policy, dividends are considered a residual after
A) investment financing needs have been met.
B) preferred stock is issued.
C) EPS is allocated.
D) retained earnings are financed.

Question

Quizplus · Accepted Answer

According to the residual dividend payout policy, dividends are considered a residual after investment financing needs have been met. This means that a company first uses its earnings to fund any investment opportunities it has or to pay off any debts it may have. Once these needs are met, then the company can consider distributing dividends to its shareholders.

According to the Residual Dividend Payout Policy, Dividends Are Considered