Determination of stock fair value at ISN involves the value of dividends in terms of the amount, rate and consistency. Since 1961 when Miller & Modigliani wrote their opinion, there has been debate over the importance of dividends in determining the value a specific stock may provide to an investor. We have believed it is a component in determining the overall value and does influence the price investor’s are willing to pay for a security.
The attached pdf is a copy of the write-up by Philip Murphy at S&P Dow Jones Indices on the subject.
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