In industries with volatile earnings the residual dividend


Which of the following is true?

A. In industries with volatile earnings, the residual dividend policy results in the most consistent dividend stream.

B. If the clientele effect is correct, firms should follow a constant dividend payout ratio policy.

C. In general, the higher the number of positive NPV investment opportunities for a firm, the lower the dividend payout ratio.

D. According to the informational content of dividends, an increase in dividends is always a

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Financial Management: In industries with volatile earnings the residual dividend
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