The Reason the Modigliani-Miller Theory Holds Is Because, According to the

question 6

Multiple Choice

The reason the Modigliani-Miller theory holds is because, according to the , the price of stock or bond equals the .

• A)classical theory; present value of its expected income
• B)expectations theory; average of expected interest rates
• C)liquidity preference theory; average of expected interest rates
• D)Fisher effect; expected rate of inflation

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