This is a payout policy whereby a company's dividend payment should equal the cash left after financing all the investments that have positive net present values.

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The residual dividend payout policy is a dividend policy where a company uses its earnings to finance its operations and investment activities, and only distributes the remaining earnings as dividends. This ensures that the company is able to fund all its profitable investment opportunities before paying out dividends, which can lead to better long-term value for shareholders.

This Is a Payout Policy Whereby a Company's Dividend Payment