Which of the Following Is NOT One of Modigliani and Miller's

question 25

Multiple Choice

Which of the following is NOT one of Modigliani and Miller's set of conditions referred to as perfect capital markets?

• A)All investors hold the efficient portfolio of assets.
• B)There are no taxes,transaction costs,or issuance costs associated with security trading.
• C)A firm's financing decisions do not change the cash flows generated by its investments,nor do they reveal new information about them.
• D)Investors and firms can trade the same set of securities at competitive market prices equal to the present value of their future cash flows.

---

Definitions:

Pessimistic Causal Attributions

The tendency to explain negative events as being caused by stable, internal, and global factors.

Pathway Thinking

A cognitive process focusing on identifying and planning realistic steps towards goal achievement.

Agency Thinking

The capacity of individuals to act independently and make their own free choices, influenced by personal beliefs and goals.

Problem-focused Coping

A coping strategy targeting the causes of stress in practical ways, aiming to reduce or eliminate the stressors.