The MM hypothesis of the irrelevance of dividends is based on which of the critical assumption ? (i) Investors can forecast future prices & dividends with certainty. (ii) The firm has a given investment policy which

CS Executive · Financial and Strategic Management · PYQS · December 2023
The MM hypothesis of the irrelevance of dividends is based on which of the critical assumption ? (i) Investors can forecast future prices & dividends with certainty. (ii) The firm has a given investment policy which does not change. (iii) All financing is done only through retained earnings. (iv) There are no taxes. (v) Perfect capital market in which all investors are rational.
(A) (i), (ii) and (iii) only
(B) (iii), (iv) and (v) only
(C) (i), (ii), (iv) and (v) only
(D) (ii), (iii), (iv) and (v) only

Answer & Explanation:

Correct Answer: Option (C)

Official answer key: (C).

Topics: Financial Management

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