Which one of the following is not an example of market imperfections that make dividend policy relevant?
A) Institutional restrictions on stock holdings
B) Differences in dividend-payout ratios
C) Transaction costs such as brokerage fees
D)Differences among investors in marginal tax rates

Question

Quizplus · Accepted Answer

Differences in dividend-payout ratios are not an example of market imperfections. Market imperfections that make dividend policy relevant include institutional restrictions, transaction costs, and tax differences, but the dividend-payout ratios themselves are a result of a company's dividend policy, not a market imperfection.

Which One of the Following Is Not an Example of Market