Which of the Following Assumptions in Asset Pricing Under the Modigliani-Miller

question 12

Multiple Choice

Which of the following assumptions in asset pricing under the Modigliani-Miller theorem that is consistent with all pricing models?

• A)Return on assets is always by the way of capital gains.
• B)The dividend growth rate is equal to the expected rate of return.
• C)Firms are either financed by debt or by equity.
• D)Equilibrium prices cannot provide opportunities for riskless arbitrage profits.

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Definitions:

Free Association

A method employed in psychoanalysis where the patient is encouraged to speak freely about anything that occurs to them, aiming to reveal hidden emotions and thoughts by avoiding self-censorship.

Psychological Disorders

Mental disorders characterized by significant disturbances in an individual's cognition, emotional regulation, or behavior, leading to distress or impairment in functioning.

Humanistic Psychology

A psychological perspective that emphasizes the study of the whole person and the uniqueness of human experience, focusing on self-actualization and personal growth.

Human Subjects Committee

A board, often within an academic or research institution, that reviews and approves research involving human participants to ensure ethical standards are maintained.