#9

[Ch 14] 8. It has been shown that in the absence of taxes and other market imperfections, firm value will be naffected by dividend policy. Explain the logic behind this conclusion. Next, describe three real-world factors that may cause one dividend policy to be preferable to another. I 9 The residual dividend approach is the best dividend policy to adopt if a firm's management wants to maximize the current value per share of the existing stock. Do you agree or disagree with this statement? State and justify your conclusions