The dividend irrelevance theory, proposed by Miller and Modigliani, says that provided a firm pays at least some dividends, how much it pays does not affect either its cost of capital or its stock price.

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The dividend irrelevance theory, proposed by Miller and Modigliani, actually states that the firm's value is determined by its earnings and the risk of its underlying assets, but not by its dividend policy. Thus, the theory suggests that the stock price is not affected by changes in dividend policy, but it does not argue that paying some dividends is sufficient.

The Dividend Irrelevance Theory, Proposed by Miller and Modigliani, Says