Teaching UGC NET Mock Test Series 2025 (Paper 1 & 2) Business Finance Capital budgeting decisions Dividend decision
According to the Residual Dividend Theory, dividend payments are determined based on:
1
The availability of excess funds after all investment opportunities with positive net present value are undertaken.
2
The preferences of shareholders for a consistent dividend payout ratio.
3
The desire to maintain a stable dividend payout ratio regardless of investment opportunities.
4
The goal of maximizing shareholder wealth by paying out all available earnings as dividends.