QUESTION 1 Which of the following is not one of the four steps of the Residual Dividend Model to establish a target payout ratio?

QUESTION 1

Which of the following is not one of the four steps of the Residual Dividend Model to establish a target payout ratio?

a.It determines the optimal capital budget

b.Given its target capital structure, it determines the amount of equity needed to finance that budget

c.It uses retained earnings to meet equity requirements to the extent possible

d.Pays dividends even if earnings are not enough to support the optimal capital budget

e.None of the above

0.2 points