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Theory of Irrelevance - M.M Approach - Dividend Decision Part-2 (in Hindi)
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Heena Malhotra
Believe in Conceptual Learning.

Unacademy user
Hi Shivam plz make more videos of this subject
I and E kya denote karta h m and npo formule mein. today u didn't give reply ma'am.i think u r busy some work.but I will wait for your reply. I posted one query in leverage chapter mcq.but u didn't give response today.
Heena Malhotra
a year ago
I = Amount required for investment E = Total earning during the period.. Sorry for the late reply :)
maam good teaching wd grt explanation but formulas r difficult to remember....🤔🤔🤔
Heena Malhotra
a year ago
Thank you so much Janak.. there is only one solution , revise them on daily basis.. Ek jagah hi sabhi formulas likhiye aur daily 5-10 min m unhe revise kijiye.. :) :)
Janak Chauhan
a year ago
yes ma'am but 1st paper n 2nd paper ki tayari saath rak rahi hu n its very difficult for me.. hardly I got only 3hrs study for my both the subject aadha time toh revision mein chala jata hai n new concept yaad karne mein problem ho rahi hai...M losing my confidence too....
Heena Malhotra
a year ago
Do not loose your confidence, aap aisa kro daily revise mt kro.. aap Roz 3 hours Nye concepts seekho, main points sath sath note down kro aur Sunday ko ya kissi bhi ek din hafte m unhe revise kro..
Heena Malhotra
a year ago
abhi bhi lagbhag 60-75 days h , 3 hours m preparation aram se hogi.. bas confidence ke sath Puri mehnat kro :)
Janak Chauhan
a year ago
thanku maam 🙂🙂🙂for ur motivation 🙂
Fozia Bhat
10 months ago
ma'am plz research proposal pe ek video banayiye,, presentation n all
mam you are a good explainer
  1. Dividend Decisions By Heena Malhotra

  2. Irrelevance Theory (Dividend is irrelevant) M.M. Approach Theories of Dividend Walter Model Relevance Theory (Dividend is relevant) Gordon Model By Heena Malhotra

  3. Modigliani and Miller (M.M) HYPOTHESIS o Modigliani - Miller theory was proposed by Franco Modigliani and Merton Miller in 1961. o MM approach is in support of the irrelevance of dividends i.e. firm's dividend policy has no effect on its value of assets. By Heena Malhotra

  4. Assumptions of M.M Hypothesis MM hypothesis is based on the following assumptions: Perfect capital markets: The firm operates in a market in which all investors are rational and information is freely available to all. No taxes or no tax discrimination between dividend income and capital appreciation (capital gain): This assumption is necessary for the universal applicability of the theory, since, the tax rates or provisions to tax income may be different in different countries. .Fixed investment policy: It is necessary to assume that all investment should be financed through equity only, since, implication after using debt as a source of finance may be difficult to understand. Further, the impact will be different in different cases. No floatation or transaction cost: Similarly, these costs may differ country to country or market to market. .Risk of uncertainty does not exist. Investors are able to forecast future prices and dividend with certainty and one discount rate is appropriate for all securities and all time periods. By Heena Malhotra

  5. According to MM hypothesis Market value of equity shares of its firm depends solely on its earning power and not influence by the manner in which its earnings are split between dividends is and retained earnings. .Market value of equity shares is not affected by dividend size. MM hypothesis is primarily based on the arbitrage argument. Through the arbitrage process, MM hypothesis discusses how the value of the firm remains same whether the firm pays dividend or not. Here PD P- Price in the beginning of the period P1- Price at the end of the period. D1 Dividend at the end of the period. K- Cost of equity/ rate of capitalization/ discount rate By Heena Malhotra

  6. o MM Hypothesis can be explained in another form also presuming thot investmentrequired by the firm on the account of payment of dividends is financed out of new issue of equity shares. I(E-nD1) P1 (n+m)P1-(I-E 1+Ke By Heena Malhotra

  7. Advantages of MM Hypothesis Various advantages of MM Hypothesis are as follows 1. This model is logically consistent. 2. It provides a satisfactory framework on dividend policy with the the concept of Arbitrage process. Limitations of MM Hypothesis Various Limitations of MM Hypothesis are as follows 1. Validity of various assumptions is questionable. 2. This model may not be valid under uncertainty By Heena Malhotra

  8. Irrelevance Theory (Dividend is irrelevant) M.M. Approach Theories of Dividend Walter Model Relevance Theory (Dividend is relevant) Gordon Model By Heena Malhotra

  9. Residual Approachh By Heena Malhotra