Miller and Modigliani's argument for dividend irrelevance assumes an efficient market.

Question

Quizplus · Accepted Answer

Miller and Modigliani's argument for dividend irrelevance is based on the assumption of an efficient market where all available information is already reflected in stock prices. In such a market, investors do not prefer one form of payout (dividends or capital gains) over the other, and therefore the choice of dividend policy should have no impact on the value of the firm.

Miller and Modigliani's Argument for Dividend Irrelevance Assumes an Efficient