In the Context of the M&M Irrelevance Theorem, in a World

Multiple Choice

In the context of the M&M Irrelevance theorem, in a world with no taxes and no bankruptcy costs,

A) the firm's value is unaffected by capital structure.
B) the firm should maximize the value of the firm by maximizing the firm's debt.
C) the firm should borrow to the point where the marginal benefits of debt equal the marginal costs.
D) the firm cannot make a decision about the optimal capital structure with the existing information.