Modigliani and Miller Dividend Irrelevance states that in perfect capital markets, holding _ policy fixed, the firm's choice of dividend policy is irrelevant and does not affect the initial share price.

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Modigliani and Miller Dividend Irrelevance suggests that in perfect capital markets, where there are no taxes or transaction costs, holding investment policy fixed, dividend policy is irrelevant and does not affect the initial share price. This theory assumes that investors can always reinvest their dividends themselves at the same rate of return as the firm could. Therefore, choices A, B, and D are not relevant to the theory.

Modigliani and Miller Dividend Irrelevance States That in Perfect Capital