Dividend policy can affect the value of the firm for which of the following reasons?
A) Personal taxes
B) Flotation costs
C) Shareholder transaction costs
D) All of these are correct

Question

Quizplus · Accepted Answer

Dividend policy can affect the value of the firm for several reasons, including personal taxes, flotation costs, and shareholder transaction costs. Personal taxes can impact the value of the firm because investors may prefer smaller or larger dividends depending on their individual tax situation. Flotation costs are the costs associated with issuing new securities to finance investment projects, and dividend payments can affect the need for new financing. Shareholder transaction costs are the costs associated with buying or selling shares, and dividend policy can affect the frequency and amount of these transactions. Therefore, all of these reasons are correct.

Dividend Policy Can Affect the Value of the Firm for Which