Which of the Following Is NOT One of Modigliani and Miller's

question 46

Multiple Choice

Which of the following is NOT one of Modigliani and Miller's set of conditions referred to as perfect capital markets?

• A) All investors hold the efficient portfolio of assets.
• B) There are no taxes, transaction costs, or issuance costs associated with security trading.
• C) A firm's financing decisions neither change the cash flows generated by its investments, nor do they reveal new information about them.
• D) Investors and firms can trade the same set of securities at competitive market prices equal to the present value (PV) of their future cash flows.

---

Definitions:

Legalized Slavery

The condition where slavery is allowed and regulated by law, historically practiced in many parts of the world, including the United States until the 19th century.

Mexican Nationals

Refers to citizens of Mexico, whether living in Mexico or abroad, recognized legally by the Mexican government.

Temporary Worker

An individual employed on a non-permanent basis, often for a specified period or for the duration of a particular project.

Jewish Shopkeepers

Refers to Jewish individuals who own or operate retail businesses, a characterization that touches on both ethnic identity and occupational association.