A company made $10 million in revenue. It is interested in pursuing a new project that costs $2 million, but will make them $7 million in the long run. How much should the company pay in dividends under the Residual Dividend Model?
A company made $10 million in revenue. It is interested in pursuing
a new project that costs $2 million, but will make them $7 million in the long run. How much should the company pay in dividends under the Residual Dividend Model?
$8 million
$10 million
$3 million
The company should not pay dividends.
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