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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 am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes

Barnes

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.