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Eduncle posted an MCQ
October 17, 2019 • 15:52 pm 0 points
  • UGC NET
  • Management

M-M Hypothesis for capital structure is based on which code of the following assumptions ?

M-M Hypothesis for capital structure is based on which code of the following assumptions ? (a) Capital markets are perfect (b) Firms belong to equal risk class (c) There is 100% dividend payout ratio (d) There are nominal corporate taxes Select the correct code.

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    Eduncle Best Answer

    These are assumptions of Modigliani Miller approach :
    Perfect capital markets.
    There are no taxes.
    Investors are rational.
    There is 100% dividend pay-out ratio no retain earnings
    There is no floatation cost.

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