Which of the Following Is Not a Modigliani and Miller

question 26

Multiple Choice

Which of the following is not a Modigliani and Miller assumption regarding dividend irrelevance?

• A)There are no costs of trading shares.
• B)Investors can borrow at the same rate as the company.
• C)There are personal and corporate taxes.
• D)All market participants (e.g.management and shareholders)have the same information.

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Definitions:

Third Restatement of Torts

An influential set of principles released by the American Law Institute, providing a comprehensive update and clarification on tort law in the United States.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another, often in financial matters or trusteeship.

Fraud

is the act of gaining a financial or personal advantage over others through deceit or trickery, often considered a criminal offense.

Fraud

Purposeful misleading to achieve unlawful benefits or to cheat someone out of their legitimate rights.