Which of the following is an assumption of the Miller-Modigliani dividend irrelevancy theorem?
A) The expected rate of return of the firm is equal to the dividend growth rate.
B) The firm will make profit every year and consistently pay dividends.
C) The firm is either 100% equity financed or 100% debt financed.
D) The investment,financing and operating policies of the firm are held fixed.
Correct Answer:
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Q5: Investors prefer retained earnings over a
Q6: In the presence of taxes,which of the
Q7: Dividend payout ratio is the ratio of
Q8: Which of the following is true of
Q9: Consider the choice between paying out earnings
Q11: Under imputation systems:
A)dividends are tax-free and capital
Q12: Explain the Miller-Modigliani dividend irrelevancy theorem.
Q13: The tax preference for debt financing versus
Q14: In a classical tax system,_.
A)dividends are taxed
Q15: Compare the classical and imputation tax systems.
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