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Question 1. One position expressed in the financial literature is that firms set their dividends as a residual after using income to support new investments.
Question 1. One position expressed in the financial literature is that firms set their dividends as a residual after using income to support new investments. Explain what a residual policy implies (assuming that all distributions are in the form of dividends).
Question 2. Discuss each of the following terms: a. Dividend irrelevance theory and bird-in-the-hand theory b. Tax effect theory and clientele effect c. Declaration date; holder-of-record date; ex-dividend date; payment date
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