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    Principles of Corporate Finance Study Set 5
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    Exam 17: Does Debt Policy Matter
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    Modigliani and Miller Proposition II States That the Rate of Return
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Modigliani and Miller Proposition II States That the Rate of Return

Question 50

Question 50

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Modigliani and Miller Proposition II states that the rate of return required by the shareholders increases, steadily, as the firm's debt-equity ratio increases.

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