According to the Modigliani & Miller dividend indifference theorem, if a company decreased its dividend per share, an investor would be forced to sell his common stock at a depressed price.

Question

Quizplus · Accepted Answer

According to the Modigliani & Miller dividend indifference theorem, the value of a firm is not affected by its dividend policy. Therefore, a decrease in dividend per share would not necessarily lead to a depressed stock price and investors would not be forced to sell their shares.

According to the Modigliani & Miller Dividend Indifference Theorem, If