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According to MM theory, in a world with taxes and bankruptcy costs but no other market imperfections, which of the following is true? Highly innovative
According to MM theory, in a world with taxes and bankruptcy costs but no other market imperfections, which of the following is true?
Highly innovative firms (who hire many inventors) should use higher leverage
Firms who just added a high level of fixed assets to their balance sheet should use a lower leverage
None of the above
All firms should have a target leverage
Firms should use less debt when their stocks are temporarily over-valued
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