Signaling theory of dividend policy

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a) Merton Miller and Franco Modigliani (MM) argued that the value of the firm depends only on the income produced by its assets, not on how this income is split between dividends and retained earnings. Explain this argument in detail with the help of theoretical reasoning and supports.

b) How signaling theory of capital structure is different from the signaling theory of dividend policy

Reference no: EM132623544

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