Miller and Modigliani's dividend irrelevance theory says that the percentage of its earnings a firm pays out in dividends has no effect on its cost of capital,but it does affect its stock price.

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Miller and Modigliani's dividend irrelevance theory posits that the dividend policy of a company has no effect on its stock price or its cost of capital, assuming perfect capital markets, no taxes, and no transaction costs.

Miller and Modigliani's Dividend Irrelevance Theory Says That the Percentage