187. CSO: 2B6f LOS: 2B6l The residual theory of dividends argues that dividends a. are necessary to maintain the market price of the common stock. b. are irrelevant. c. can be foregone unless there is an excess demand for cash dividends. d. can be paid if there is income remaining after funding all attractive investment opportunities.

2B6L THE RESIDUAL THEORY OF DIVIDENDS ARGUES THAT DIVIDENDS A. ARE N...

CMA EXAM SUPPORT PACKAGE 2

187.

CSO: 2B6f

LOS: 2B6l

The residual theory of dividends argues that dividends

are necessary to maintain the market price of the common stock.

are irrelevant.

can be foregone unless there is an excess demand for cash dividends.

can be paid if there is income remaining after funding all attractive investment

opportunities.