Irrelevance result

Irrelevance result

The Modigliani and Miller theorem that a firm's capital structure is irrelevant to the firm's value.

Irrelevance Result

An economic theory stating that the performance of a firm's investments has no relation to how they are financed, whether stock, debt, or cash. The irrelevance result postulates that the quality of the investment, rather than the financing behind it, is the relevant question for a firm. It is part of the Modigliani-Miller theorem. See also: Fisher's Separation Theorem.
References in periodicals archive ?
It is ironic that this leverage irrelevance result is what many may want to remember from Merton Miller.
Rather, what justifies focusing on the leverage irrelevance result is that it describes "the central tendency around which observations scatter" (Modigliani and Miller (1958), p.
I believe that a large part of that irrelevance results from the fact that so many people no longer trust the mass media.