Modigliani and Miller argue that when the firm has no acceptable investment opportunities, it should
A. close its doors.
B. distribute the unneeded funds to the owners.
C. lower its cost of capital.
D. retain the funds until an acceptable project arises.
Answer:B
Modigliani and Miller argue that when the firm has no acceptable investment opportunities, it should
A. close its doors. B. distribute the unneeded funds to the owners. C. lower its cost of capital. D. retain the funds until an acceptable project arises.