MM's dividend irrelevance theory says that while dividend policy does not affect a firm's value, it can affect the cost of capital.

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MM's dividend irrelevance theory posits that dividend policy does not affect a firm's value or its cost of capital. According to this theory, the value of a firm is determined by its earning power and investment policy, not by how it distributes dividends.

MM's Dividend Irrelevance Theory Says That While Dividend Policy Does