Fisher's separation theorem stipulates that the goal of any firm is to increase its value to the fullest extent, regardless of the preferences of the firm's owners. The theorem is named after American economist Irving Fisher, who first proposed this idea.
The theorem can be broken down into three key assertions. First, a firm's investment decisions are separate from the preferences of the firm's owners. Second, a firm's investment decisions are separate from a firm's financing decisions. And, third, the value of a firm's investments is separate from the mix of methods used to finance the investments.
Thus, the attitudes of a firm's owners are not taken into consideration during the process of selecting investments, and the goal of maximizing the firm's value is the primary consideration for making investment decisions. Fisher's separation theorem concludes that a firm's value is not determined by the way it is financed or the dividends paid to the firm's owners.
For related articles, check out Ten Books Every Investor Should Read and Profiting From Panic Selling.
This question was answered by Richard C. Wilson.

What does the Fisher Effect say about nominal interest rates?
Read about what economists call the Fisher effect, which states that real interest rates are equal to nominal rates minus ... Read Answer >> 
How is the Macaulay duration related to fixed income markets?
Determine how monetary policy influences the Fisher effect. The Fisher effect is used to determine real interest rates which ... Read Answer >> 
What percentage of asset management firms are privately held and not publicly traded?
Explore asset management firms, a major part of the financial services sector, and learn about the respective markets served ... Read Answer >> 
What is a typical pricetobook ratio in the financial services sector?
Understand key distinctions of the financial services sector and learn some of the equity valuation metrics analysts use ... Read Answer >>

Investing
Understanding the ModiglianiMiller Theorem
The ModiglianiMiller (M&M) theorem is used in financial and economic studies to analyze the value of a firm, such as a business or a corporation. 
Small Business
Ken Fisher's Success Story: Net Worth, Education & Top Quotes
Learn about the rise of Kenneth Fisher, the wouldbe forester who became the founder of one of the largest money management firms in the country. 
Investing
Explaining the Central Limit Theorem
Central limit theorem is a fundamental concept in probability theory. 
Investing
Where Is Ken Fisher Spending His Billions and Why?
Fisher's fund has considerably outperformed the average hedge fund for the whole of 2016 and part of 2015. 
Managing Wealth
Ken Fisher's Q1 Investment Moves: AAPL,EBAY,CSCO
Ken Fisher made some interesting changes in AAPL, EBAY, and CSCO to his portfolio in the first quarter. 
Investing
Explaining the Coase Theorem
The Coase theorem states when there are competitive markets and no transaction costs, bargaining will lead to a mutually beneficial outcome. 
Investing
Financial Forecasting: The Bayesian Method
This method can help refine probability estimates using an intuitive process. 
Financial Advisor
FAs Should Factor Clients Into Succession Plans
Financial advisory firms are finally taking succession planning seriously. Here's how. 
Trading
Spotting Breakouts As Easy As ACD
Wondering what it means to be a "logical trader"? Take a look at this system devised by Mark Fisher. 
Personal Finance
Financial Career Shift: Get In The Driver's Seat
Before you agree to work for another investment firm, be sure you know what you're getting into.

Bayes' Theorem
A formula for determining conditional probability named after ... 
Irrelevance Proposition Theorem
A theory of corporate capital structure that posits that financial ... 
Coase Theorem
A legal and economic theory that affirms that where there are ... 
Mutual Fund Theorem
An investing theory, postulated by Nobel laureate James Tobin, ... 
Arrow's Impossibility Theorem
A socialchoice paradox illustrating the impossibility of having ... 
Central Limit Theorem  CLT
A statistical theory that states that given a sufficiently large ...