The Residual Dividend Theory Suggests That Dividends Will Only Be

Multiple Choice

The residual dividend theory suggests that dividends will only be paid

A) if the tax rate on capital gains is higher than the tax rate on dividends.
B) if the corporation has more positive NPV projects than it can fund.
C) if interest rates available to shareholders are higher than the required return on the company's stock.
D) if current retained earnings exceed the equity portion of the firm's capital budget.