Which of the following is NOT one of M&M's perfect capital market assumptions?
A)Bankruptcy is costless.
B)Shareholders have more information than bondholders.
C)Individuals and firms can borrow and lend at the same rates.
D)There are no taxes.

Question

Quizplus · Accepted Answer

M&M's perfect capital market assumptions state that bankruptcy is costless, individuals and firms can borrow and lend at the same rates, there are no taxes, and all investors have access to the same information, including shareholders and bondholders. Therefore, choice B, which suggests that shareholders have more information than bondholders, is not one of M&M's assumptions.

Which of the Following Is NOT One of M&M's Perfect