Multiple Choice
MM Proposition I,without taxes,supports the argument that
A) business risk determines the return on assets.
B) it is completely irrelevant how a firm arranges its finances.
C) the cost of equity rises as leverage rises.
D) a firm should borrow money up to the point where the cost of debt equals the cost of equity.
E) financial risk is determined by the debt-equity ratio.
Correct Answer:
Verified
Correct Answer:
Verified
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