If the three conditions of Modigliani and Miller hold, then dividend policy should not affect firm value.

Name: If the three conditions of Modigliani and Miller hold, then dividend policy should not affect firm value.
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According to Modigliani and Miller, dividend policy does not affect firm value when the three conditions of no taxes, no transaction costs, and no information asymmetry hold. This is known as the dividend irrelevance theory.

If the Three Conditions of Modigliani and Miller Hold, Then