CFA Practice Question

There are 151 practice questions for this study session.

CFA Practice Question

In a world of zero taxes and perfect markets, we can show that the firm's dividend decision does not affect shareholder wealth. We simply show how the shareholder can undo the dividend policy of the firm by ______.

A. contacting top management
B. informing the financial press
C. transacting in the marketplace
Correct Answer: C

In a world of perfect markets and zero taxes, investors can undo dividend policy by transacting in the marketplace.

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