The Modigliani and Miller dividend irrelevancy theorem states that
A) dividends are preferable to stock repurchases.
B) the timing of cash distributions is important.
C) the timing of cash distributions is unimportant.
D) stock repurchases are preferable to dividends.

Question

Quizplus · Accepted Answer

The Modigliani and Miller dividend irrelevancy theorem states that the timing of cash distributions, whether through dividends or stock repurchases, is unimportant in determining the value of the firm. Therefore, neither dividends nor stock repurchases are preferable over the other.

The Modigliani and Miller Dividend Irrelevancy Theorem States That