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

Question

Quizplus · Accepted Answer

According to the Modigliani & Miller dividend indifference theorem, changes in dividend policy do not affect the value of a firm or its stock price. Therefore, decreasing the dividend per share should not necessarily lead to a depressed stock price and force investors to sell their shares.

According to the Modigliani & Miller Dividend Indifference Theorem,if a Company