The Law of Conservation of Value Implies That

Multiple Choice

The law of conservation of value implies that

A) the return on a firm's common stock is unchanged when debt is added to its capital structure.
B) the value of any asset is preserved regardless of the nature of the claims against it.
C) the return on a firm's debt is unchanged when common stock is added to its capital structure.
D) the value of an asset increases as debt is reduced.