Show the residual theory of dividends

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Reference no: EM1347504

Residual theory of dividends: pay dividends if equity is less than retained earnings?

According to the residual theory of dividends, if the firm's equity need is less than the amount of retained earnings, the firm would ___________

borrow to pay the cash dividend,

declare a dividend equal to the remaining balance,

pay no cash dividends,

or not need to consider its dividend policy

Reference no: EM1347504

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