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A firm is operating in the economy where there are no personal or corporate income taxes and that the firm's WACC is unaffected by changes
A firm is operating in the economy where there are no personal or corporate income taxes and that the
firm's WACC is unaffected by changes in the firm's capital structure.
Which of the following is true?
I.A firm's cost of equity depends on the firm's business and financial risks.
II.The cost of equity declines as the firm's leverage increases.
II only
I only
None of the above.
I and II
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