CFA Practice Question

There are 151 practice questions for this study session.

CFA Practice Question

Which of the following is not a reason why Modigliani-Miller may not hold in the real world?
A. Management's personal preferences may be opposed to value maximization.
B. Management may possess superior information compared to investors.
C. Government regulations that increase amount of information disclosed by firms.
Explanation: Modigliani-Miller assumes perfect information, so anything that increases information disclosure will not lead to MM not holding.

User Contributed Comments 1

User Comment
somk not & not. if there's another not, my answer would have been one of 2 right answers. go figure
You need to log in first to add your comment.