All of the following factors support the proposition that dividend policy matters except a) Perfect capital markets

Question:

All of the following factors support the proposition that dividend policy matters except

a) Perfect capital markets

b) Investors desire to minimize and defer taxes and capital gains get preferential tax treatment over dividend income

c) Flotation costs significantly increase the cost of new common stock compared to retained earnings.

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...