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Topic: |
Business
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Number of pages / Number of words: |
10 / 2800 |
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Share valuation has nothing to do with level of the dividend paid by the company. M&M pointed out also that, if the investor is rational, in the sense that he/she always makes decisions that maximize its wealth, is indifferent to the option, whether he/she receives capital gain or dividends. Miller and Modigliani suggests also, that the value of the company will not be affected by amount of the dividends expected from it...
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Miller and Modigliani suggests also, that the value of the company will not be affected by amount of the dividends expected from it.
Under given assumptions, company should not concern itself in paying dividends. Instead of paying dividends, money should be invested in all available projects with positive NPV in case to maximize shareholders wealth...
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General points of the essay
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