The theory that paying a dividend has very little to do with the price of a stock is consistent with ____.

Question

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The dividend irrelevance theory proposes that the price of a stock is not affected by the payment of dividends. Instead, the price is determined by factors such as the company's earnings and growth prospects. This theory suggests that investors should be indifferent to whether a company pays dividends or retains earnings, as the overall return on investment remains the same.

The Theory That Paying a Dividend Has Very Little to Do