Assume That Investors Have a 10% Required Rate of Return

question 68

Multiple Choice

Assume that investors have a 10% required rate of return on MTA share.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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