What is Residual Dividend Model? capital, only, available, practical, support

skyjiao

In practical questions, there is one talking about Residual Dividend Model, and it says Residual Dividend Model allows firms to pay out dividends only if more earnings are available than are needed to support the optimal capital budget. Does it mean that RDM is only working when the firm has extra earnings? I cannot find this concept in the notes and is it covered in the exam?

Thank you

胡老师

Residual Dividend Model，剩余股利模型，就是净利润首先按照资本结构的比例满足投资的要求，还有剩余的，用来分配股利，有多少分多少。该股利政策的优点是保证资本结构，优先使用内部资金，缺点是股利不稳定，波动大。