Question
Your firm follows a strict residual dividend policy. All else equal, which of the following factors would be most likely to lead to an increase
Your firm follows a strict residual dividend policy. All else equal, which of the following factors would be most likely to lead to an increase in the firm's dividend per share?
The number of profitable potential projects increases.
Earnings are unchanged, but the firm issues new shares of common stock.
The firm's net income increases.
The company increases the percentage of equity in its target capital structure.
Congress lowers the tax rate on capital gains, leaving the rest of the tax code unchanged.
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Get StartedRecommended Textbook for
Introduction To Corporate Finance
Authors: Laurence Booth, Sean Cleary
3rd Edition
9781118300763
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