Q 16.29. M&M states that, in a perfect market, al- though both debt and equity become riskier

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Q 16.29. M&M states that, in a perfect market, al- though both debt and equity become riskier due to an increase in the firm's leverage, both the firm's value and risk remain exactly the same. Conceptu ally, what would it take for the firm to become worth more and/or be safer even when both debt and eq- uity become riskier due to an increase in the firm's leverage?

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