Multiple Choice
Which one of the following statements matches M&M Proposition I?
A) The value of a firm is independent of the firm's capital structure.
B) The cost of equity capital has a positive linear relationship with a firm's capital structure.
C) The value of a firm is dependent on the firm's capital structure.
D) The cost of equity capital varies in response to changes in a firm's capital structure.
E) The dividends paid by a firm determine the firm's value.
Correct Answer:
Verified
Correct Answer:
Verified
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