Asked by
Ricky McCants Jr
on Dec 09, 2024Verified
Maintaining the current capital structure is consistent with both a residual and a compromise dividend policy.
Capital Structure
The mixture of debt and equity financing that a company uses to fund its operations and growth.
Residual Dividend
A policy under which a company pays dividends to its shareholders only after all its capital needs are met for a particular period.
Compromise Dividend
A dividend payment agreed upon by a company and its shareholders to be distributed, usually under circumstances where the payment amount may not meet all parties’ expectations but is deemed acceptable.
- Understand the different dividend policies and their implications.
- Assess the impact of dividend policy on a firm’s capital structure.
Verified Answer
LL
Learning Objectives
- Understand the different dividend policies and their implications.
- Assess the impact of dividend policy on a firm’s capital structure.