Show the supposition of mm hypothesis, Financial Management

Assignment Help:

Q. Show the Supposition of MM Hypothesis?

Supposition of MM Hypothesis:-

(i) There are ideal capital markets.

(ii) Investors act rationally.

(iii) Information regarding the company is available to all without any cost

(iv) There are no floatation as well as transaction costs

(v) No investor is large sufficient to influence the market price of shares.

(vi) There are no taxes

(vii) The firm has inflexible investment policy

(viii) There is no risk or else uncertainty in regard to the future profits of the firm.


Related Discussions:- Show the supposition of mm hypothesis

Show internal business risk, Internal business risk associated with the ope...

Internal business risk associated with the operational efficiency of the firm. The operational efficiency differs from company to company. The efficiency of operation is reflected

Explain the purchasing power parity, Explain the purchasing power parity, b...

Explain the purchasing power parity, both of the absolute and relative versions. What causes the deviations from the purchasing power parity? Answer:  The absolute version of p

Regional banks, Regional Banks Large banks like First Norwest, Chicago,...

Regional Banks Large banks like First Norwest, Chicago, Mellon and Crocker function regionally at the national level in a fashion same to money center banks. Regional banks ser

Define the term corporate and financial relations, Question: (a) Define...

Question: (a) Define the term "corporate and financial relations" and clearly state its components. (b) By using one example, identify the steps required to establishing cor

Zero base budgets, Zero base budgets: this is a new technique, which was f...

Zero base budgets: this is a new technique, which was first used by the US Department of Agriculture in 1961. Texas instruments, an MNC, have used it in the private sector.  But,

State the cash flow from investing activities, Cash flow from investing act...

Cash flow from investing activities The items included in this heading are: Cash payments Cash receipts Acquiring proper

Show the disadvantages of adjusted discount rate, Q. Show the Disadvantages...

Q. Show the Disadvantages of adjusted discount rate? (1) The risk premium rates resolute under this method are arbitrary. Therefore this method mayn't give objective results.

Weighted average cost of capital, Weighted Average Cost of Capital Wei...

Weighted Average Cost of Capital Weighted average cost of capital is the average cost of the costs of several sources of financing. Weighted average cost of capital is also kn

A/a2, A/A2 is generally the second- or third-highest rating that a rating a...

A/A2 is generally the second- or third-highest rating that a rating agency gives to a security or carrier. This rating indicates that there is a comparatively low risk of default a

How do tax considerations affect the cost of debt, How do tax consideration...

How do tax considerations affect the cost of debt and the cost of equity? For the reason that interest on debt is tax deductible to the issuing firm, the higher the tax rate th

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd