The preferred dividend policy in a world of no taxes and no transactions costs is to pay no dividends.

Name: The preferred dividend policy in a world of no taxes and no transactions costs is to pay no dividends.
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Quizplus · Accepted Answer

In a world of no taxes and no transactions costs, the preferred dividend policy depends on the individual preferences of the shareholders. Some shareholders may prefer to receive dividends while others may prefer to reinvest their earnings. Therefore, there is no one preferred dividend policy.

The Preferred Dividend Policy in a World of No Taxes