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The bird-in-hand hypothesis suggest that firms choosing to pay higher current dividends will enjoy higher stock prices because shareholders prefer current dividends to future ones.

The bird-in-hand hypothesis suggest that firms choosing to pay higher current dividends will enjoy higher stock prices because shareholders prefer current dividends to future ones. M&Ms response to the bird-in-hand hypothesis suggested that with perfectly priced capital markets, shareholders can generate an equivalent home-made dividend by selling stock. So, the dividend choice should matter. Is this true or false? Please justify your response.

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