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dividend irrelevance theory

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Financial Dictionary

Dividend Irrelevance Theory

A theory that investors are not concerned with a company's dividend policy since they can sell a portion of their portfolio of equities if they want cash.

Investopedia Commentary

The dividend irrelevance theory essentially indicates that an issuance of dividends should have little to no impact on stock price.

Related Links

How and Why Do Companies Pay Dividends?

See also: Dividend, Dividend Payout Ratio, Dividend Policy, Efficient Market Hypothesis, Market Efficiency

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