Question $4(1$ point$)$

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Which of the following statement is NOT correct?

One method for a firm to keep stable dividends is to set low 'regular' dividend and supplement it with an extra dividend when times are good.

Using the Residual Distribution Model, a firm uses retained earnings as its only equity source.

A firm should consider residual policy when setting target payout, and follow it rigidly.

One method for a firm to keep stable dividends is to calculate dividend distributions and payout ratio using an average estimated earnings and investments opportunities for the next five years or so$.$