Market Structure Is Determined by the Number and Relative Size

question 71

True/False

Market structure is determined by the number and relative size of the firms in the industry.

---

Definitions:

MM

The Modigliani-Miller theorem, a foundational concept in corporate finance proposing that under certain conditions, the value of a firm is unaffected by how it is financed.

Firm's Stock

The capital raised by a corporation through the issuance and subscription of shares representing ownership interest in the company.

Dividend Cuts

A reduction in the dividend payments announced by a company, often due to financial difficulties or a need to retain more earnings for investments.

Target D/E Ratio

The desired debt-to-equity ratio that a company aims to achieve to optimize its capital structure.