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Basic Question 5 of 10
Which of the following assumptions is not necessary for dividend irrelevance?
B. Brokerage costs are equal to zero.
C. Floatation costs are equal to zero.
A. The corporate tax rate is greater than the personal tax rate.
B. Brokerage costs are equal to zero.
C. Floatation costs are equal to zero.
User Contributed Comments 2
| User | Comment |
|---|---|
| kalps | Dividend irrelevance theory: 1) Transaction costs are ZERO 2) Taxes are ZERO |
| kodali | As dividends are double taxed in US, tax rates are irrelevent |
I used your notes and passed ... highly recommended!
Lauren
Learning Outcome Statements
compare theories of dividend policy and explain implications of each for share value given a description of a corporate dividend action;
CFA® 2025 Level II Curriculum, Volume 3, Module 16.