This is the idea that it does not matter whether a firm pays dividends or not as derived from a Modigliani and Miller Theorem.

Question

Quizplus · Accepted Answer

The Dividend Irrelevance Theorem, proposed by Modigliani and Miller, states that the value of a firm is not affected by its dividend policy. In other words, whether a company pays dividends or not, its value will remain the same as long as the earning capacity and risk profile of the firm remain constant. Therefore, the choice is B, Dividend Irrelevance Theorem.

This Is the Idea That It Does Not Matter Whether