This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Which of the following statements is a reasonable criticism of the MM and Miller models? (Read 485 times)

awgagawg

  • Full Member
  • ***
  • Posts: 144
on: Aug 7, 2023
Which of the following statements is a reasonable criticism of the MM and Miller models?

◦

Both MM and Miller assume that personal and corporate leverage are perfect substitutes. However, an individual investing in a levered firm has less loss exposure as a result of corporate limited liability than if “homemade” leverage had been used.


◦

Brokerage costs were assumed away by MM and Miller, making the switch from L to U costless. Even though brokerage and other transaction costs do exist, they would not impede the arbitrage process.


◦

MM initially assumed that corporations and investors can borrow at the risk-free rate, because most individual investors must borrow at the same rates as those paid by large corporations.


◦

MM and Miller assume that there are no costs associated with financial distress, and they also consider agency costs.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
Buy Test-Bank


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by awgagawg on Aug 7, 2023

Khareemom14

  • Full Member
  • ***
  • Posts: 163
Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 39% of students answer this correctly


awgagawg

  • Member
  • Posts: 144
Reply 2 on: Aug 7, 2023
YES! Correct, THANKS for helping me on my review

isabelt_18

  • Member
  • Posts: 342
Reply 3 on: Yesterday
:D TYSM

« previous next »
 

Did you know?

Thyroid conditions cause a higher risk of fibromyalgia and chronic fatigue syndrome.

Did you know?

Drug abusers experience the following scenario: The pleasure given by their drug (or drugs) of choice is so strong that it is difficult to eradicate even after years of staying away from the substances involved. Certain triggers may cause a drug abuser to relapse. Research shows that long-term drug abuse results in significant changes in brain function that persist long after an individual stops using drugs. It is most important to realize that the same is true of not just illegal substances but alcohol and tobacco as well.

Did you know?

The first successful kidney transplant was performed in 1954 and occurred in Boston. A kidney from an identical twin was transplanted into his dying brother's body and was not rejected because it did not appear foreign to his body.

Did you know?

Atropine, along with scopolamine and hyoscyamine, is found in the Datura stramonium plant, which gives hallucinogenic effects and is also known as locoweed.

Did you know?

The most common childhood diseases include croup, chickenpox, ear infections, flu, pneumonia, ringworm, respiratory syncytial virus, scabies, head lice, and asthma.

Four main models that describe the relationship between ecosystem function and biodiversity. Four main models that describe the relationship between ecosystem function and biodiversity.
Three Models for DNA Replication Three Models for DNA Replication
Miller-Urey Experiment Updated Miller-Urey Experiment Updated
A poster commemorates Doris “Dorie” Miller, a mess attendant aboard the USS West Virginia at ... A poster commemorates Doris “Dorie” Miller, a mess attendant aboard the USS West Virginia at ...
Computer Models Computer Models
Models for Genetic Analysis of Behavior Models for Genetic Analysis of Behavior
Video: Neuron Structure Animation

For a complete list of videos, visit our video library