Miller and Modigliani's Indifference Proposition Regarding Dividend Policy

question 13

Multiple Choice

Miller and Modigliani's indifference proposition regarding dividend policy

• A)assumes that tax rates increase at the same rate as inflation.
• B)assumes that investors can sell their stock at a fair price.
• C)states that investors are indifferent between stock dividends and cash dividends.
• D)states that investors are indifferent between stock repurchases and cash dividends.

---

Definitions:

Personality Traits

Enduring characteristics or qualities that define an individual’s behavior, attitude, and emotional patterns.

Individual's Concept

A person's unique, abstract understanding or idea of something.

Personality

The combination of characteristics or qualities that form an individual's distinctive character, affecting how they think, feel, and behave.

External Locus

A belief that outcomes of events are determined by forces outside personal control.