Residual Theory of Dividends suggests that a company should first cover all expenses and then distribute ___ as dividends.

The remaining profits

True or False: According to the Dividend Relevance Theory, consistent dividend payments build trust among shareholders.

True

The Bird-in-the-Hand Theory emphasizes the preference for ___ over potential future returns.

Immediate dividends

Fill in the blank: The Dividend Policy Irrelevance Theory states that the method of profit distribution has little significance as long as the business remains ___.

Profitable

What does the Stable Dividend Policy entail regarding profit distribution?

It promises to distribute a fixed percentage of profits, varying with the company's earnings.

True or False: The Residual Theory advocates for distributing dividends only after all investment opportunities have been exhausted.

True

Fill in the blank: Companies that follow an Irregular Dividend Policy distribute dividends based on the ___ of the company.

Current circumstances

How does the Dividend Irrelevance Theory view the payment of dividends versus reinvestment of profits?

It posits that both methods lead to the same total return for shareholders.

According to the Dividend Relevance Theory, what impact does a regular dividend payment have on investor behavior?

It increases trust and attracts more investment due to perceived stability.

Fill in the blank: The No Dividend Policy is often adopted by ___ companies to reinvest all profits for growth.

Young or early-stage

True or False: The Bird-in-the-Hand Theory suggests that shareholders prefer uncertain future gains over immediate dividends.

False; it suggests they prefer immediate dividends.

What is the key principle behind the concept of residual dividends?

Dividends are paid from profits remaining after all necessary expenses and investments have been covered.