The Dividend Irrelevance Theory, Proposed by Miller and Modigliani, Says

question 46

True/False

The dividend irrelevance theory, proposed by Miller and Modigliani, says that as long as a firm pays a dividend, how much it pays does not affect either its cost of capital or its stock price.

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Definitions:

Mirror Image Rule

The mirror image rule is a principle in contract law that requires an acceptance to be on exactly the same terms as the offer in order to result in a binding contract.

Statute of Frauds

A rule of law mandating that some contract varieties must be documented and signed by the involved parties to be legally binding.

Writing Requirement

A legal stipulation that certain contracts or agreements must be in writing to be enforceable.

Merchants

People or companies involved in buying and selling products, services, or commodities to make profits.