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The Residual Dividend Model is rarely used in practice. Instead companies use this model to set a maximum dividend. Why is this? 1) The residual

The Residual Dividend Model is rarely used in practice. Instead companies use this model to set a maximum dividend. Why is this?

1) The residual dividend model results in a volatile dividend.

2) There is no Cliental for the residual dividend model.

3) Stock investors like constantly changing dividends

4) Stock investors like stable predictable dividends.

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