Question
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
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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Introduces Quantitative Finance
Authors: Paul Wilmott
2nd edition
470319585, 470319581, 978-0470319581
