What is the 'Fisher's Separation Theorem'
The Fisher's separation theorem is a theory stating that:
1. A firm's choice of investments are separate from its owner's attitudes towards the investments.
2. It is possible to separate a firm's investment decisions from the firm's financial decisions.
BREAKING DOWN 'Fisher's Separation Theorem'
This theory says a firm's value is not affected by how its investments are financed or how the distributions (dividends) are made to the owners.