Question
8. In a world with no taxes, Modigliani and Miller (MM) show that a firms capital structure does not affect its value. However, when taxes
8. In a world with no taxes, Modigliani and Miller (MM) show that a firms capital structure does not affect its value. However, when taxes are considered, MM show a positive relationship between debt and value, i.e., the firms value rises as its uses more and more debt, other things constant.
a. True
b. False
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Financial Management Principles And Practice
Authors: Timothy Gallagher
6th Edition
1930789157, 978-1930789159
