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Modigliani and Miller proposed the Dividend Irrelevance Theory, which posits that, because dividend policy has no effect on the price of a firms stock or
Modigliani and Miller proposed the Dividend Irrelevance Theory, which posits that, because dividend policy has no effect on the price of a firms stock or its cost of capital, investors are indifferent between dividends and capital gains from retained earnings. This theory does not hold true in the real world. True False
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