Residual distribution model
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Residual distribution model is a model, in which firms should pay dividends only when more earnings are available than needed to support the optimal capital budget.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Residual distribution model. In this model, firms should pay dividends only when more earnings are available than needed to support the optimal capital budget.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
