Dividend Irrelevance Theory

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DEFINITION of '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 EXPLAINS 'Dividend Irrelevance Theory'

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

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