1.

Explain In Brief The Assumptions Of Modigliani-miller Theory?

Answer»

Assumptions of MODIGLIANI – Miller THEORY:

  • Capital markets are perfect. All information is freely available and there is no transaction cost.
  • All investors are rational.
  • No existence of CORPORATE taxes.
  • Firms can be grouped into “Equivalent risk CLASSES” on the basis of their business risk.

Assumptions of Modigliani – Miller Theory:


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