Which of the following multiple choices are correct for the following 2 questions: A key underlying...
Which of the following multiple choices are correct for the following 2 questions:
A key underlying assumption of MM Proposition I without taxes is that:
1. financial leverage increases risk.
2. individuals and corporations borrow at the same rate.
3. corporations are all-equity financed.
4. individuals can borrow at lower rates than corporations
MM Proposition I without taxes proposes that:
1. the value of an unlevered firm exceeds that of a levered firm.
2. the value of a levered firm exceeds that of an unlevered firm.
3. shareholder wealth is directly affected by the capital structure selected.
4. leverage does not affect the value of the firm.
5. there is one ideal capital structure for each firm.
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Which of the following multiple choices are correct for the
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