Many academics subscribe to the Dividend Irrelevance theorem that states that in a world with no taxes or costs of financial distress, dividend policy is irrelevant. After all, an investor could simply sell a portion of their portfolio to create a liquidity stream and would not need to rely on dividends from their portfolio holdings. Given the double taxation of both corporate profits and shareholder dividends, some muse that dividends are inefficient altogether.
This article will demonstrate that the Dividend Aristocrats (NOBL), constituents of the S&P 500 (SPY) that have paid