How do you think it will affect the value of the firm

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Reference no: EM131247391

The chairman of the board of Alphanull Corporation has announced that the corporation will change its dividend policy from paying a fixed dollar dividend per share. Instead, dividends will be paid out as a residual.

That is, any cash flows left over after the firm has undertaken all profitable investments will be paid out to shareholders. This new policy will obviously increase the variability of dividends paid. How do you think it will affect the value of the firm?

Reference no: EM131247391

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