With respect to the proposition that dividend policy does not matter, in order to raise an additional $5,600 in cash by issuing stock, the stock sold must be worth:

Question

Quizplus · Accepted Answer

According to the dividend irrelevance theory, the value of the firm is not affected by its dividend policy. Therefore, to raise $5,600 in cash, the stock sold must be worth exactly $5,600.

With Respect to the Proposition That Dividend Policy Does Not