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11 Under the conditions of the M&M capital structure theory, the firm's financing decisions do not have an impact on firm value. When this theory

image text in transcribed 11 Under the conditions of the M&M capital structure theory, the firm's financing decisions do not have an impact on firm value. When this theory holds (i.e., is true), how do the firm's financing decisions affect the firm's weighted average cost of capital? Describe how the cost of equity and cost of debt behave as the firm increases its use of debt financing

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