Which of the following isnota reason why companies are not always entirely clear on their dividend policy?

a)For fear of giving away sensitive information.b)In order to maintain a managerial advantage over shareholders.c)Because they do not know how much is available for dividends.d)Companies have different abilities to communicate.

In both their dividend model and capital gearing model, Modigliani and Miller use which of the following principles?

a)The value of the firm is fundamentally determined by its capital gearing ratio.b)The value of the firm is fundamentally determined by the NPV of the firm's projects.c)The value of the firm is fundamentally determined by its dividend policy.d)The value of the firm is fundamentally determined by the ability of managers to communicate with the capital markets.

Which of the following isnota fundamental assumption made by Modigliani and Miller?

a)No taxes.b)There is imperfect information.c)Firms can be classified into distinct risk classes.d)Possible to borrow and lend at the risk-free rate.