A firm has $20 million is cash and $800 million in other assets, making its total assets $820 million. It has 20 million shares outstanding and pays $1 dividend to each share. Modigliani and Miller say the payment of dividend is irrelevant since the investor can synthetically create a $1 dollar dividend for himself with no wealth change in a no tax world. Illustrate M&Ms proposition, assuming the investor owns 1,000 shares. To synthetically create the $1 dividend and have same wealth the investor must.

		buy 24 shares
		buy 25 shares
		sell 25 shares
		sell 24 shares