In a world with no taxes, no information or transaction costs, and a fixed real investment policy, a dividend policy should not affect the value of a firm.

Question

Quizplus · Accepted Answer

If there are no taxes, no information or transaction costs, and a fixed real investment policy, the dividend policy should not affect the value of a firm. This is because these factors are some of the main reasons why dividend policy can have an impact on a firm's value. Without these factors, the value of the firm would be determined solely by its underlying investments and assets, which would not be affected by the dividend policy.

In a World with No Taxes, No Information or Transaction