The Modigilian-Miller (M&M) Theorem States That

question 61

Multiple Choice

The Modigilian-Miller (M&M) theorem states that:

• A) in an efficient market without taxes and bankruptcy costs, the value of a firm depends upon the firm's capital structure.
• B) in an efficient market without taxes and bankruptcy costs, the value of a firm does not depend upon the firm's capital structure.
• C) in an efficient market without taxes and bankruptcy costs, the value of a firm does not depend upon the firm's cost of capital.
• D) none of the options.

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Definitions:

Roman Catholic Natural Law Ethics

An ethical theory based on the belief that the moral law is discoverable by every person through the use of reason and is grounded in human nature and purpose, as taught within Roman Catholic theology.

Utilitarianism

A moral theory that emphasizes the best action is the one that maximizes utility, generally defined as that which produces the greatest well-being of the greatest number of people.

Kantian Ethics

A deontological ethical theory developed by Immanuel Kant, focusing on the principle that actions are morally right if they are done out of duty and adhere to a universal moral law.

Rawls's Ethics

A theory of justice proposed by philosopher John Rawls, focusing on fairness, equality, and moral decision-making under a veil of ignorance.