Which of the Following Is an Assumption of the Modigliani-Miller

question 4

Multiple Choice

Which of the following is an assumption of the Modigliani-Miller theorem?

• A)The dividend growth rate is equal to the expected rate of return.
• B)No arbitrage opportunities exist in the economy.
• C)All firms are financed using equity.
• D)All borrowing and lending activity is at the risk-free rate.

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