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M&M Proposition I States That,in a World of No Taxes

Question 82

Multiple Choice

M&M Proposition I states that,in a world of no taxes and no bankruptcy,________.


A) the cost of debt increases with leverage
B) the choice of financing is relevant to determining the firm's value in the short-run
C) how the company finances its operations affects firm value
D) how the company finances its operations does not affect firm value

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