BUSINESS FINANCE II (İŞLETME FİNANSI II) - (İNGİLİZCE) Dersi Payout (Dividend) Policy soru detayı:

CEVAP:

Merton Miller and Franco Modigliani (1961) (MM) argued that while dividend policy does not have any impact on either the value of the company’s stock and its cost of capital, the value of the company is determined only by the earnings power and risk of its investments ( Merton H. Miller and Franco Modigliani, (1961) ). This is called a dividend irrelevance theory set in a perfect world where

(1) investors can buy and sell stocks without any transaction costs,

(2) companies can issue stocks without any costs,

(3) there are no taxes and transaction costs,

(4) the markets are perfectly efficient,

(5) investors are completely rational and

(6) there are no conflicts of interest between managers and owners.