Assume That Investors' Have a 10% Required Rate of Return

question 61

Multiple Choice

Assume that investors' have a 10% required rate of return on MTA stock. According to the Modigliani and Miller dividend indifference theorem, if investors could choose between a $1.00 dividend today and $1.10 dividend one year from today

• A) they would prefer $1.00 today.
• B) they would prefer $1.10 one year from today.
• C) neither alternative would satisfy them.
• D) they would have no preference.

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Definitions:

Optic Disc

Point at which axons of ganglion cells of the retina converge to form the optic nerve, which then penetrates through the fibrous tunic of the eye.

Posterior Chamber

Chamber of the eye between the iris and the lens.

Lens

A transparent, flexible optical element in the eye that focuses light onto the retina, allowing for clear vision.

Cornea

The eye's outermost, transparent layer, which covers the iris and pupil and helps focus incoming light.