According to Modigliani and Miller, a firm's dividend policy is irrelevant: if the financial markets are inefficient if the financial markets are perfect if the financial markets are efficient if all investors are rational because dividends are discretionary

According to Modigliani and Miller, a firm's dividend policy is irrelevant: if the financial markets are inefficient if the financial markets are perfect if the financial markets are efficient if all investors are rational because dividends are discretionary

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter11: Risk-adjusted Expected Rates Of Return And The Dividends Valuation Approach

Section: Chapter Questions

Problem 8QE

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Question

According to Modigliani and Miller, a firm's dividend policy is irrelevant:

if the financial markets are inefficient

if the financial markets are perfect

if the financial markets are efficient

if all investors are rational

because dividends are discretionary

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