The Fisher Separation Theorem is a fundamental principle in finance and investment theory attributed to economist Irving Fisher. It states that under certain conditions, a firm's investment decisions and its financing decisions can be separated without affecting the overall value of the firm. ### Key Points of the Fisher Separation Theorem: 1. **Investment and Consumption**: The theorem emphasizes that a firm (or investor) can choose the optimal investment project based purely on its expected return, independent of the financing method used to fund that project.
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