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If a firm adheres strictly to the residual dividend policy, and its net income is less than the amount of total capital budget times the
If a firm adheres strictly to the residual dividend policy, and its net income is less than the amount of total capital budget times the proportion of equity financing (Ws) and therefore the firm is planning to issue new common stock. This would suggest that..
- A.The dividend payout ratio is decreasing then increasing.
- B.No dividend is paid during the year.
- C.The dollar amount of capital investments has decreased.
- D.The dividend payout ratio has remained constant.
- E.The dividend payout ratio is increasing.
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