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The residual theory of dividends argues that dividends * A O are necessary and important to maintain the market price of any ordinary shares O not relevant unless there is an excess demand for cash dividends O can only be distributed if there is income remained after funding all prospective investment O are irrelevant in any dividend distribution plan

The residual theory of dividends argues that dividends * A O are necessary and important to maintain the market price of any ordinary shares O not relevant unless there is an excess demand for cash dividends O can only be distributed if there is income remained after funding all prospective investment O are irrelevant in any dividend distribution plan

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The residual theory of dividends argues that dividends * A O are necessary and important to maintain the market price of any ordinary shares O not relevant unless there is an excess demand for cash dividends O can only be distributed if there is income remained after funding all prospective investment O are irrelevant in any dividend distribution plan
Transcribed Image Text:The residual theory of dividends argues that dividends * A O are necessary and important to maintain the market price of any ordinary shares O not relevant unless there is an excess demand for cash dividends O can only be distributed if there is income remained after funding all prospective investment O are irrelevant in any dividend distribution plan
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