Dividend irrelevance theory
Dividend irrelevance theory is the theory that holds that dividend policy has no effect on either the price of a firm's stock or its cost of capital.
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Dividend irrelevance theory. Holds that dividend policy has no effect on either the price of a firm's stock or its cost of capital.
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
