Purchase Solution

Should companies treat dividends as a residual payment

Not what you're looking for?

Ask Custom Question

What are the arguments that may arise when discussing : should companies treat dividends as a residual payment to shareholders

Purchase this Solution

Solution Summary

The solution explains why dividends should not be treated as residual payment

Solution Preview

Treating dividends as a residual payment is a passive dividend policy. The arguments against such a policy would be -

1. Dividends have information content, they provide signal to the market regarding the financial health of the company. Treating dividends as a residual would mean that dividends would change every year and investors would find it ...

Purchase this Solution

Free BrainMass Quizzes
Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Basics of corporate finance

These questions will test you on your knowledge of finance.


This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.