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Management · Q146

Financial Management

Graduate and Post Graduate · Management · question 146

Q146

According to the _______ model, the dividend decision is irrelevant.

A.
MM
Answer
B.
Garden
C.
Walter
D.
XY

Answer: Option A

Solution

Answer: Option A
Solution:
According to the MM model, the dividend decision is irrelevant. Modigliani and Miller suggested that in a perfect world with no taxes or bankruptcy cost, the dividend policy is irrelevant. They proposed that the dividend policy of a company has no effect on the stock price of a company or the company's capital structure.