In recent years, managers who wish to prioritize investment opportunities over cash distributions to shareholders would be more likely to favor a residual dividend policy over share repurchase offers.

Question

Quizplus · Accepted Answer

A residual dividend policy is focused on funding projects and investments first, and only distributing dividends from the leftover or "residual" earnings, which aligns with prioritizing investment opportunities. Share repurchase offers, on the other hand, are a method of returning capital to shareholders, not a policy prioritizing investments over distributions.

In Recent Years, Managers Who Wish to Prioritize Investment Opportunities