Which of the Following Assumptions Was Not Part of the Original

question 105

Multiple Choice

Which of the following assumptions was not part of the original Modigliani and Miller Model?

• A)Securities trade in perfectly efficient capital markets.
• B)Securities trade with no transaction costs.
• C)Income taxes are fixed.
• D)Rates for borrowing do not change regardless of the amount borrowed.
• E)Rates for borrowing are the same for investors and companies.