The significant and unrealistic assumptions necessary under the dividend irrelevance model indicate that dividend policy is relevant.

Question

Quizplus · Accepted Answer

The significant and unrealistic assumptions required by the dividend irrelevance model, including perfect capital markets, no taxes, and certainty about the future, suggest that dividend policy is actually relevant in real-world conditions where such assumptions do not hold.

The Significant and Unrealistic Assumptions Necessary Under the Dividend Irrelevance