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Basic Question 5 of 10

Which of the following assumptions is not necessary for dividend irrelevance?

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.
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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
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I just wanted to share the good news that I passed CFA Level I!!! Thank you for your help - I think the online question bank helped cut the clutter and made a positive difference.
Edward Liu

Edward Liu

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.