Miller and Modigliani's Dividend Irrelevance Theory Says That the Percentage

question 50

True/False

Miller and Modigliani's dividend irrelevance theory says that the percentage of its earnings a firm pays out in dividends has no effect on either its cost of capital or its stock price.

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Definitions:

Apparent Authority

A situation in which a person appears to have the authorization to act on behalf of another entity, leading third parties to reasonably believe such authority exists.

Knowingly

Acting with awareness or deliberate intention, often referenced in legal contexts to imply a person had knowledge or should have had knowledge of the implications of their actions.

Ratification

The act of formally confirming or approving an agreement, often after the agreement is initially made, to make it officially valid.

Fiduciary Duty

An obligation to act in the best interest of another party, such as that of a trustee towards a beneficiary.