Under Fisher's Separation Theorem,the Key Factor That Affects the Way

question 17

Multiple Choice

Under Fisher's separation theorem,the key factor that affects the way in which financial decisions are made is that:

• A)it is critical that there are effective capital markets in place to allow firms to borrow from those lenders who choose the greater security of debt rather than equity.
• B)regardless of an individual shareholder's preference between investment and consumption,there is an identifiable single decision for the firm that all shareholders will support.
• C)shareholders are effectively separated from all decisions of the firm,in that they have no interest in the outcome of those decisions.
• D)each and every shareholder's preference between investment and consumption is effectively separate in determining the activities of the firm.

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