Which of the following theories is a part of the dividend irrelevance group school of thought ?
The Miller-Modigliani model belongs to the dividend irrelevance approach. Under its assumptions, the firm’s investment policy determines value, and dividing earnings between…
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Which of the following theories is a part of the dividend irrelevance group school of thought ?
Answer and explanation
Correct answer A
The Miller-Modigliani model belongs to the dividend irrelevance approach. Under its assumptions, the firm’s investment policy determines value, and dividing earnings between dividends and retention does not independently change shareholder wealth.
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Madhya Pradesh SET (MP SET)