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Residual Dividend Theory Explained by sureshansmithi is a document available to read on EtoBox.
The Residual Dividend Theory posits that dividends should be paid from remaining earnings after funding all profitable investment opportunities, prioritizing reinvestment over payouts. Developed by Gordon and Lintner, this model emphasizes that dividends are a residual item, leading to potential fluctuations based on capital expenditure needs. While relevant for growth companies and capital-intensive industries, the theory faces criticisms for causing dividend instability and may not suit mature firms with
- Author
- sureshansmithi
- Language
- EN