An Extension of \dividend Policy, Growth, and the Valuation of Shares" by Miller and Modigliani

Miller and Modigliani (1961) consider valuation of innnite horizon rms that may not engage in purchasing their own shares. While their fundamental valuation approach applies also to rms that purchase their own shares, their stream of dividends approach does not. The latter approach is modiied so that it can be used for valuation of innnite horizon rms including those which may purchase their own shares. The modiied approach is the natural extension of the traditional dividend stream approach used for valuing nite horizon rms. Moreover, it is proved to be equivalent to the fundamental valuation approach.