Multiple Choice
Assume the following selected financial information about a firm that is about to restructure capital by exchanging equity for debt: 
Which of following would be true as a result of the restructuring according to the Modigliani-Miller model with taxes but without bankruptcy costs?
A) The new debt would contribute $600,000 to the value of equity due to its tax effect.
B) The market value of the remaining equity would be $1,500,000.
C) The total value of the firm would increase to $3,000,000.
D) All of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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