The Dividend-Irrelevance Proposition of Miller and Modigliani Depends on the Following

question 21

Multiple Choice

The dividend-irrelevance proposition of Miller and Modigliani depends on the following relationship between investment policy and dividend policy.

• A)The level of investment does not influence or matter to the dividend decision.
• B)Once dividend policy is set the investment decision can be made as desired.
• C)The investment policy is set before the dividend decision and not changed by dividend
• Policy.
• D)Since dividend policy is irrelevant there is no relationship between investment policy and
• Dividend policy.
• E)Miller and Modigliani were only concerned about capital structure.