What kind of company is most likely to follow a strict residual dividend policy? A firm with highly variable earnings and investment All companies A firm whose earnings are cyclical and follow the economy A firm whose investment needs change often A firm with stable, predictable earnings and investment Most firms have earnings that vary considerably from year to year and do not grow at a reliably constant pace. Furthermore, their required investment may change often. Does this mean the residual dividend model can\'t be of any help to most firms? Yes No If you were to graph a firm\'s earnings, cash flow, and dividends over the past 20 years, which would you expect to be the most stable over time? Earnings Cash flow Dividends. Solution The company that finances its projects from equity that requires interna Investment generaly follows Residual Dividend Policy. Hence the correct option is D. 2. No Residual Dividend policy is generraly followed by the firms that finances its projects from equity. .

1. What kind of company is most likely to follow a strict residual dividend policy? A firm with
highly variable earnings and investment All companies A firm whose earnings are cyclical and
follow the economy A firm whose investment needs change often A firm with stable, predictable
earnings and investment Most firms have earnings that vary considerably from year to year and
do not grow at a reliably constant pace. Furthermore, their required investment may change
often. Does this mean the residual dividend model can't be of any help to most firms? Yes No If
you were to graph a firm's earnings, cash flow, and dividends over the past 20 years, which
would you expect to be the most stable over time? Earnings Cash flow Dividends.
Solution
The company that finances its projects from equity that requires interna Investment generaly
follows Residual Dividend Policy. Hence the correct option is D.
2. No
Residual Dividend policy is generraly followed by the firms that finances its projects from
equity.