According to the MM dividend irrelevance proposition,since investors do not need dividends to convert their shares to cash,they will not pay higher prices for firms with higher dividend payouts.

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The MM dividend irrelevance proposition states that, in theory, the dividend policy of a company should have no effect on the value of the company and its share price. This is because investors can create their own cash flow by selling some of their shares if they want income rather than relying on dividend payments. Therefore, firms with higher dividend payouts should not necessarily have higher share prices than firms with lower dividend payouts.

According to the MM Dividend Irrelevance Proposition,since Investors Do Not