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

question 18

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 do not 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.

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Definitions:

Existential Import

The implication or assumption within a statement or proposition that asserts the existence of something.

Lakes

Large bodies of standing freshwater formed in hollows on the earth's surface, often fed by rivers or streams.

Existential Import

In logic, the implication that a statement has regarding the existence of the subjects it mentions.

Referents

The actual objects, actions, or concepts that words or symbols represent or signify.