Miller, Merton(redirected from Merton Miller)
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Nobel Laureate and coauthor of the famous Miller-Modigliani theorems. Finance professor at the University of Chicago.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
A financial academic and theoretician. Along with Franco Modigliani, he developed the Modigliani-Miller theory, which states that if financial markets are perfectly efficient, then how a company is a financed has no bearing on its performance. That is, without taxes, asymmetric information, or government and other unnecessary fees, a company is equally likely to perform well regardless of whether it is financed by equity issues, debt, or something else. It also states that a company's dividend policy is irrelevant in these circumstances. Miller's theory has been used to justify the increased use of leverage since the 1980s. He was awarded the Nobel Prize in Economics (along with Harry Markowitz and William Sharpe) in 1990 for this and other contributions. Critics contend his theory has led to needless risk-taking. He was born in Boston in 1923 and died in Chicago in 2000.
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