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a firm adheres strictly to the residual dividend policy, and if its optimal capital budget requires the use of all earnings for a given year
a firm adheres strictly to the residual dividend policy, and if its optimal capital budget requires the use of all earnings for a given year along with new debt according to the optimal debt/assets ratio), then the firm should pay elect one: a. dividends only out of funds raised by the sale of new common stock. b. dividends only out of funds raised by selling of fixed assets. c. no dividends to common stockholders. d. the same dividend as it paid the prior year. e dividends only out of funds raised by borrowing money (i.e., issuing debt)
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