Which of the Following Modigliani and Miller Assumptions Regarding Dividend

question 46

Multiple Choice

Which of the following Modigliani and Miller assumptions regarding dividend irrelevance is true?

• A)There are no personal or corporate taxes.
• B)Investors can borrow at the same rate as the company.
• C)All market participants (e.g.management and shareholders)have the same information.
• D)There are no costs of trading shares.
• E)None of the above

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Definitions:

Mutual Understanding

A shared awareness or comprehension of each others' feelings, thoughts, and intentions.

Symbolic Communication

The use of symbols, signs, and gestures to convey meanings, messages, or information without using words.

Conduits

Entities or channels through which information, resources, or services are transmitted.

Messages

Units of communication that convey information, thoughts, or ideas from one entity to another through various mediums.