ABSTRACT
Theories about the fundamental determinants of share prices have existed for many years. One of the more impressive is that put forward by Miller and Modigliani 1 , which relates the total market value of the firm to, among other things, its future earnings. But, like most others, the Miller-Modigliani (MM) theory is silent on how and when the investor learns about future earnings. This is not intended as a criticism of MM, because when testing their theory they were able to by-pass these questions…
