Modigliani and Miller suggest that the value of a firm is not affected by the firm's dividend policy, due to ________. 1) the relevance of dividends 2) the clientele effect 3) the informational content 4) the optimal capital structure
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This means that whether a firm pays high or low dividends, it will not impact the overall value of the firm. Option 1: The relevance of dividends - This option is incorrect because Modigliani and Miller's theory suggests that dividends are not relevant to the Show more…
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