In a world of taxes but no transaction costs,the preferred strategy to maximize wealth is to pay dividends.

Question

Quizplus · Accepted Answer

In a world of taxes but no transaction costs, retaining earnings (rather than paying dividends) is generally preferred for wealth maximization because retained earnings can be reinvested into the company, potentially leading to capital gains which are often taxed at a lower rate than dividends.

In a World of Taxes but No Transaction Costs,the Preferred