Mieczysław Kowerski | Laura Haniewska
pages: 77-88; JEL classification: G32, G35; Keywords: Miller-Modigliani\'s dividend irrelevance theory, cum-dividend day, ex-dividend day, Warsaw Stock Exchange; Abstract: In 1961, Miller and Modigliani (M–M) published a dividend irrelevance theory, which shows that the payment of dividends does not make any changes to the value of the company. The assumption about the existence of the perfect market made by M–M became the basis for a common criticism of the theory, and the critics also tried to empirically prove that dividend payments have a positive effect on future stock prices. A different interpretation was presented by Damodaran (2007), who stated that a dividend is a compensation for lost capital gains on the first day without a dividend. The aim of the article is to verify the M-M theory according to the Damodaran approach based on the data of companies listed on the WSE in 2019–2021. For this purpose the calculations of the total rate of return on investments consisting in the purchase of shares at the end of the cum-dividend day and the sale of these shares at the end of the exdividend day were carried out. Then, the average values of the total rates of return in each of the three years were calculated and using the Student\'s t-test it was examined whether the average of one-session rate of return is insignificantly different from zero. If so, it would mean that the dividend irrelevance theory is correct.