Multiple Choice
Modigliani and Miller followed up their initial work with a new model that incorporated a world with corporate taxes.Which of the statements below results from this model?
A) A new Proposition I with taxes and it states: All debt financing is optimal.
B) A new Proposition II with taxes and it states: The WACC of the firm falls as more debt is added.
C) The more debt sold,the greater the tax shield and the smaller the government's share of the firm.
D) All of these
Correct Answer:
Verified
Correct Answer:
Verified
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