Loading...
CFA Level 2
Corporate Finance

Impact of Dividend Policy on Stock Price

Easy Dividends And Repurchases Dividend Policy Theories

ABC Corporation is a publicly traded company that has maintained a stable dividend policy for several years. Recently, the management team is evaluating whether to continue this policy amidst rising cash flows and changing market conditions. According to the dividend policy theories, particularly the Modigliani-Miller theorem, what impact does the company's dividend decision have on its stock price in a world without taxes and perfect markets?

Hint

Submitted7.7K
Correct6.5K
% Correct85%