A Key Assumption of the Miller and Modigliani (MM)dividend Irrelevance

question 8

Multiple Choice

A key assumption of the Miller and Modigliani (MM) dividend irrelevance argument is that

• A)future stock prices are certain.
• B)firms have an adequate supply of Treasury shares.
• C)there exists a risk-free asset.
• D)new shares are sold at a fair price.

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Definitions:

Regulate

To control or maintain the rate or speed of a process or function, often ensuring proper function or compliance with standards.

Self-Esteem

An individual's subjective evaluation of their own worth.

Egocentrism

Putting oneself at the center of things such that one is unable to perceive the world from another person’s point of view. Egocentrism is normal in early childhood, but is a matter of choice, and rather intolerable, in adults.

Self-Esteem

An individual's subjective evaluation of their own worth or value, which can influence mental health and behavior.