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Which of the following is the assumption of the MM model...

This question belongs to Commerce Financial Management
Financial Management
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Which of the following is the assumption of the MM model on dividend policy?

Answer & Solution
Correct Answer: Option C
The firm has an infinite life is the assumption of the MM model on dividend policy. According to Miller and Modigliani Hypothesis or MM Approach, dividend policy has no effect on the price of the shares of the firm and believes that it is the investment policy that increases the firm’s share value.
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