- CFA Exams
- CFA Level I Exam
- Topic 4. Corporate Issuers
- Learning Module 16. Analysis of Dividends and Share Repurchases
- Subject 2. Dividend Policy and Company Value: Theory
CFA Practice Question
Which of the following assumptions is necessary for dividend irrelevance?
B. Transactions costs are equal to zero.
C. The corporate tax rate is less than the personal tax rate.
A. The dividend tax rate is greater than the capital gains rate.
B. Transactions costs are equal to zero.
C. The corporate tax rate is less than the personal tax rate.
Correct Answer: B
Zero transactions costs and no taxes are necessary for dividend irrelevance.
User Contributed Comments 1
| User | Comment |
|---|---|
| katybo | homemade dividends possible |