In the Absence of Taxes,MM Argues That

Multiple Choice

In the absence of taxes,MM argues that

A) no one capital structure for a firm is superior to any other capital structure for that firm.
B) the cost of equity for a levered firm is equal to the firm's unlevered WACC.
C) homemade leverage is insufficient to offset a firm's use of leverage.
D) the value of a levered firm exceeds the value of the unlevered firm.
E) the cost of equity decreases as the debt-equity ratio increases.