Modigliani and Miller Argue That When a Firm Has No

question 111

Multiple Choice

Modigliani and Miller argue that when a firm has no acceptable investment opportunities, it should ________.

• A) preserve the funds and not declare dividends
• B) distribute the surplus funds to the owners
• C) lower its cost of capital
• D) retain the funds until an acceptable project arises

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Definitions:

Pseudonymity

The state of using or having a pseudonym, allowing a person to engage in activities without revealing their true identity.

Blockchain

A decentralized, distributed ledger technology that records transactions across multiple computers in a way that ensures security and transparency.

Irreversibility

The characteristic of a process or decision that cannot be undone or reversed once it has been initiated.

Social Sustainability

Practices and strategies that promote the well-being of individuals and communities in a way that can be maintained over the long term without depleting resources or causing harm.