In a Modiglian and Miller world with no taxes, companies X and Y are identical in all respects, except that company X pays 20m in dividends whereas Y pays no dividends.As illustrated in the table below, both companies have no cash freely available after their investment needs are accounted for. Assume for simplicty that both firms are 100% equity financed and that X finances all its dividends by issuing equity. Which of the following statements is inaccurate? Y 100 0 X 100 0 20 0 Firm Firm's value before dividends (in m) Free cash flow before dividends Dividends Cash deficit after dividends (to be made up for by issuing equity) Firm value after dividends Firm value after equity issue 10 -20 100 100 80 100 If both X and Y initially have 10m shares outstanding, an investor holding 10 shares in X needs to buy 2.5 additional shares after dividends to replicate the position of someone who holds 10 shares in Y If both X and Y initially have 10m shares outstanding, an investor holding 10 shares in Y needs to sell two of their shares to replicate the position of someone who holds 10 hares in X An investor holding 10% of company Y can replicate their position by selling their stake, buying a 10% stake in company X and then selling a number of shares equivalent to 10% of X's dividends Investors are indifferent between holding shares in X or in Y