Question: Finance managers are primarily concerned with three key decisions: financing, investment, and dividend decisions. However, financial management theory has claimed that only investment decisions may

Finance managers are primarily concerned with three key decisions: financing, investment, and dividend decisions. However, financial management theory has claimed that only investment decisions may have any importance.

(a) Critically discuss Modigliani & Millers claim that only investment decisions have any importance to the market value of a firm and that decisions about financing and dividends depend upon a firm's optimal investment policy.

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