Two Prominent Finance Researchers (Modigliani and Miller) Showed That the Firm's

Multiple Choice

Two prominent finance researchers (Modigliani and Miller) showed that the firm's ____.

A) optimal capital structure consists of approximately equal proportions of debt and equity
B) value is independent of its capital structure in perfect capital markets with no income taxes
C) cost of capital is minimized when its capital structure consists of approximately equal proportions of debt and equity
D) cost of capital is maximized when its capital structure consists of approximately equal proportions of debt and equity