MM's dividend irrelevance proposition assumes an efficient market with no taxes or issue costs.

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The dividend irrelevance proposition put forth by Miller and Modigliani assumes certain ideal market conditions, including an efficient market with no taxes or issue costs. This means that in such a market, the value of a firm is determined solely by its investment policy and not by the way it chooses to finance its investments or distribute profits to shareholders. However, in the real world, taxes and issue costs can impact a firm's decision on dividends and capital structure, making the dividend irrelevance proposition less applicable.

MM's Dividend Irrelevance Proposition Assumes an Efficient Market with No