The document summarizes Miller and Modigliani's 1961 paper on dividend policy. They argue that under perfect market conditions, a firm's dividend policy does not affect its value or a share's expected return. They show dividend policy has no effect on the valuation of shares as long as the firm's investment policy and earnings are unchanged. Investors are indifferent to receiving earnings as dividends or reinvestment with capital gains having the same net present value either way. While uncertainty and market imperfections may introduce some minor exceptions, the irrelevance of dividend policy remains the general conclusion.