According to the dividend irrelevancy theorem, management can set the amount of current dividends at any level

Question

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The dividend irrelevancy theorem states that the value of a firm is determined by its investment policy and not by its dividend policy. This means that a firm's decision to pay dividends or not does not affect the value of its stock, so management can set the amount of current dividends at any level without making the current stockholders either better or worse off. However, this assumes that the stockholders have access to perfect information and can reinvest their dividends at the same rate as the company can invest its profits.

According to the Dividend Irrelevancy Theorem, Management Can Set the Amount