Merton Miller

Merton Howard Miller was born on May 16, 1923, in Boston, Massachusetts, USA. He would grow up to become an influential American economist known for his groundbreaking work in the field of financial economics. Miller's contributions, particularly through the Modigliani-Miller theorem, would have a lasting impact on the study and practice of corporate finance.

In 1958, Merton Miller, together with Franco Modigliani, published the highly influential Modigliani-Miller theorem. This theorem, which they introduced in a landmark paper, argues that under certain assumptions, the market value of a firm is independent of its capital structure. This profound insight laid the foundation for modern corporate finance theory.

In 1961, Merton Miller and Franco Modigliani introduced the dividend irrelevance theory, which is a fundamental aspect of their broader Modigliani-Miller theorem. They argued that in a perfect market, the dividend policy of a company is irrelevant to its valuation. This challenged previously held beliefs that dividends directly affected stock prices.

Merton Miller joined the faculty of the University of Chicago in 1976 as a professor of finance at the Booth School of Business. During his tenure, he further developed his research on capital markets, and his contributions to the field continued to influence generations of students and academics. Miller’s work at Chicago solidified his reputation as a leading figure in financial economics.

Merton Miller was awarded the Nobel Prize in Economic Sciences in 1990. He shared the prize with Harry Markowitz and William F. Sharpe for their pioneering work in the theory of financial economics. The recognition was primarily due to Miller's work on the Modigliani-Miller theorem and its implications for the understanding of corporate finance and investment markets.

Merton H. Miller passed away on June 3, 2000, at the age of 77. His death marked the end of a significant chapter in financial economics, but his work continues to influence scholars and practitioners. During his lifetime, Miller's insights and theories transformed the fields of economics and finance, leaving a lasting legacy.