Multiple choice

The dividend irrelevance theorem to share valuation was propounded by

  1. James E. Walter

  2. Myron Gordon

  3. Modigliani and Miller

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Modigliani – Miller theory is a major proponent of ‘Dividend Irrelevance’ notion. According to this concept, investors do not pay any importance to the dividend history of a company and thus, dividends are irrelevant in calculating the valuation of a company.

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