One Key Assumption of the Miller and Modigliani (MM) Dividend

question 63

Multiple Choice

One key assumption of the Miller and Modigliani (MM) dividend irrelevance is that:

• A) Future stock prices are certain
• B) There are no capital gains taxes
• C) Capital markets are efficient
• D) All investments are risk-free

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Definitions:

Market Testing

The process of evaluating the viability of a new product or service through controlled customer exposure, gathering feedback before a full-scale launch.

Planned Obsolescence

A strategy where products are designed with a limited useful life or undergo frequent changes, compelling consumers to purchase new products more often.

Pricing Strategy

The approach a company takes to setting the price of its products or services, based on costs, market demand, competitor pricing, and other factors.

Estimating Costs

The process of predicting the financial resources required to complete a project, production, or any business activity.