How does finanancing policy investment policy and dividend


1. What is the 'excess burden' of a commodity tax. Explain why optimal tax theory suggests that lump sum income taxes should be used rather than commodity taxes in order to raise revenue.

2. How does finanancing policy, investment policy and dividend policy interelate ?

3. Explain why the value of a share of stock does not depend on how long you plan to hold the stock.

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