Fisher's Separation Theorem

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Dictionary Says

Definition of 'Fisher's Separation Theorem'


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.

Investopedia Says

Investopedia explains '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.

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