Merton H. Miller
The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1990
Born: 16 May 1923, Boston, MA, USA
Died: 3 June 2000, Chicago, IL, USA
Affiliation at the time of the award: University of Chicago, Chicago, IL, USA
Prize motivation: “for their pioneering work in the theory of financial economics”
Prize share: 1/3
Merton Miller was born in Boston, MA, USA. During WWII, Miller worked as an economist in the Division of Tax Research at the US Treasury Department. In 1949, he started studying at John Hopkins University, earning his Ph.D. in 1952. Miller joined the University of Chicago in 1961. His first wife died in 1969, leaving Miller and their three daughters. He later remarried.
Merton Miller collaborated with his colleague Franco Modigliani (Economic Sciences Prize 1985) on the paper The Cost of Capital, Corporate Finance and the Theory of Investment. The Modigliani-Miller theorem explains the relationship between a company’s capital asset structure and dividend policy and its market value and cost of capital. The theorem demonstrates that how a manufacturing company funds its activities is less important than the profitability of those activities.
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