A firm's dividend payout decision has a major effect on the value of the firm in the absence of tax.

Name: A firm's dividend payout decision has a major effect on the value of the firm in the absence of tax.
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According to the Modigliani-Miller theorem, in a perfect market (no taxes, no transaction costs, no bankruptcy costs, and symmetric information), the value of a firm is unaffected by how that firm is financed or its dividend policy.

A Firm's Dividend Payout Decision Has a Major Effect on the Value