Which of the following statements is false?

Question

Quizplus · Accepted Answer

The statements A, B, and C are all based on foundational principles in finance. Statement A refers to the Modigliani-Miller theorem under the assumption of no taxes, no bankruptcy costs, and efficient markets, which posits that the value of a firm is unaffected by its capital structure. Statement B is related to the concept of the Capital Market Line (CML) in portfolio theory, which suggests that investors can achieve any point on the CML through borrowing or lending at the risk-free rate. Statement C is based on the dividend irrelevance theory proposed by Modigliani and Miller, which states that, under certain conditions, a firm's dividend policy does not affect its market value. Therefore, none of the given options is false within the context of their theoretical frameworks.

Which of the Following Statements Is False