M& m proposition ii, without taxes, is the proposition that: select one:
a. a firm's cost...
M& m proposition ii, without taxes, is the proposition that: select one:
a. a firm's cost of equity is a linear function with a slope equal to (ra - rd).
b. the capital structure of a firm has no effect on the firm's value.
c. the size of the pie does not depend on how the pie is sliced.
d. the cost of equity is equivalent to the required rate of return on a firm's assets.
e. the cost of equity depends on the return on debt, the debt-equity ratio, and the tax rate.
Answers: 1
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