Everyone recognizes that's a joke because obviously the number and shape of the pieces doesn't affect the size of the pizza. And similarly, the stocks, bonds, warrants, etc., issued don't affect the aggregate value of the firm.
More Quotes from Merton Miller:
For me, as an economist, it was frustrating to have no sense of a theory of corporate finance to tie all this material together.Merton Miller
So everybody has some information. The function of the markets is to aggregate that information, evaluate it, and get it incorporated into prices.
Merton Miller
But in practice, if often comes down to not suffering a loss as big as the huge gain you made a while ago.
Merton Miller
My main interest, however, was in economics, not law.
Merton Miller
Most people might just as well buy a share of the whole market, which pools all the information, than delude themselves into thinking they know something the market doesn't.
Merton Miller
To beat the market you'll have to invest serious bucks to dig up information no one else has yet.
Merton Miller
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