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Question 16
16) Modigliani and Miller argue that investors:
A
prefer dividends to capital gains.
B
B) prefer capital gains to dividends
C
C) are indifferent between dividends and capital gains
D) D) prefer cash on hand
(3



Answer :

GinnyAnswer

Final answer:

Modigliani and Miller argue that investors are indifferent between dividends and capital gains, weighing risks, returns, liquidity, and redemption terms in their investment decisions.


Explanation:

Modigliani and Miller argue that investors are indifferent between dividends and capital gains. They believe that investors weigh the risks, returns, liquidity, and redemption terms when making investment decisions.

Investors' preferences are based on the risk-return trade-off and the certainty of redemption terms. Capital gains and dividends play crucial roles in shaping investors' decisions regarding their investments.


Learn more about Investor Preferences here:

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