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The World of Modigliani and Miller

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The World of Modigliani and Miller

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Robert Alan Hill

The World of Modigliani and Miller

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The World of Modigliani and Miller

1st edition

© 2015 Robert Alan Hill & bookboon.com

ISBN 978-87-403-1062-7

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The World of Modigliani and Miller

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Contents

Contents

Part One: An Introduction 9

1.1 he Foundations of Finance: An Overview 11

1.2 he Development of Financial Analysis 12

1.4 Fisher’s Legacy and Modigliani-Miller 18

Part Two: he Dividend Decision 24

2 How to Value a Share 25

2.1 he Capitalisation Concept 27

2.2 he Capitalisation of Dividends and Earnings 29

2.3 he Capitalisation of Current Maintainable Yield 31

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The World of Modigliani and Miller

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Contents

2.4 he Capitalisation of Earnings 32

3 he Role of Dividend Policy 36

3.2 Gordon’s ‘Bird in the Hand’ Model 39

4 MM and Dividends 43

4.1 he MM Dividend Hypothesis 43

4.2 he MM Hypothesis and Shareholder Reaction 45

4.3 he MM Hypothesis: A Corporate Perspective 47

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