MM theory of irrelevance is based on
A Efficient Market Hypothesis
B The Clientele Theory
C Optimal capital Structure theories
D Net Income approach
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Answer:
B The Clientele Theory
Explanation:
MM say that if an investor gets a dividend that's more than he expected then he can re-invest in the company's stock with the surplus cash flow. If the expected dividend is too small, then he can sell a part of his shares and replicate the same cash flow he would get if the dividend was what he expected.
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